Yahoo reports 44% drop in Q2 earnings, writes down Tumblr's value by more than 40%
In announcing today a 44% year-over-year decline in per share earnings for the second quarter (from 16 cents a share to 9 cents), Yahoo also said that in retrospect it paid too much for Tumblr and took a $482 million write off. Yahoo had been carrying Tumblr on its balance sheet at a valuation much higher than its true worth. Earlier this year, another $230 million was written off Tumblr's value after the app failed to meet certain revenue targets. Yahoo also reported today a gain of $65 million in revenue year-over-year to $1.35 billion, for the three month period ended in June.
Final bids are due this week as the auction of Yahoo nears a conclusion. Verizon is considered one of the leading bidders for the company, which isexpected to draw a winning bid in the range of $3.5 to $5 billion.