Yahoo's Bartz 'pleased' about quarter; Aims to make ads less annoying; Gives Bing kudos

The company reported second quarter net income of $141.4 million, or 10 cents a share, on revenue excluding traffic acquisition costs of $1.14 billion. Wall Street was expecting Yahoo to report earnings of 8 cents a share on revenue of $1.14 billion. Non-GAAP second quarter earnings were 16 cents a share, on par with expectations (statement). In the same quarter a year ago, Yahoo reported earnings of 9 cents a share on revenue of $1.34 billion.

As for the outlook, the company projected revenue to be $1.45 billion to $1.55 billion including traffic acquisition costs. Non-GAAP operating income is expected to be $330 million to $370 million.  On a conference call with analysts, Bartz said that she was "pleased with the results" considering the economy. Overall, Bartz said Yahoo is seeing less fear in the market place. She added that the ad market may be bouncing along the bottom, but there's so many conflicting data points that a rebound is too hard to call.

Bartz also touted Yahoo's home page redesign as an example of how the company can drive engagement with users. She added that Yahoo is striving to make its adds less annoying to consumers. "We know what we are and we know what we have to do to win," she said.

New CFO Tim Morse said page views were up 7 percent and the company did a good job managing costs.

Other highlights from the conference call:

• The tone on the Yahoo call wasn't adversarial about Bing---unlike just a few weeks ago. Perhaps that indicates that there is a Microsoft deal in the works. Bartz said:

I actually think Bing is a good product. I think they've done a good job, but unfortunately they are only a month into it. I think Microsoft should be given kudos for Bing.

• Bartz touted Yahoo's strength in verticals such as news and finance, but said the home page is "the big dog."
• Yahoo will also focus on the ad experience, said Bartz. "It's no secret that our users are put off by ads that are a detriment to us," she said. Bartz said that Yahoo will look to cut frequent, annoying ads that hurt the company's brand. It will cut its revenue baseline going forward to account for these ads that will get the boot.
• The company will also spend on marketing in the third quarter to reposition Yahoo's brand.
• Yahoo wants to boost its local ad revenue and has forged a deal with AT&T to bolster the effort.