Updated from 10:51 a.m. to include additional analyst thoughts in the ninth paragraph.
NEW YORK (TheStreet) -- First-quarter earnings at Yahoo! (YHOO - Get Report) didn't exactly blow the barn doors off, but for CEO Marissa Mayer and CFO Ken Goldman (my new favorite person by the way), they were good enough. For Wall Street, that's what matters, especially as Alibaba gets ready to go public later this year.
Yahoo! reported first-quarter earnings that beat Wall Street expectations, earning 38 cents a share on $1.087 billion in revenue excluding traffic acquisition costs (TAC). It looks as if core Yahoo!, search and display advertising, is turning around a bit, as CEO Marissa Mayer noted this was the best first-quarter revenue ex-TAC since 2010.
Display revenue ex-TAC was $409 million, a 2% increase year-over-year, as the number of ads increased 7% year over year. However, like most in the Internet industry (read: Google (GOOG)), the price per ad continued to trend lower, falling 5% over the same time frame. Search continues to be a strong driver for Yahoo!, as revenue excluding TAC rose 9% over the first quarter of 2013 to $444 million.
Analysts surveyed by Thomson Reuters expected Yahoo! to earn 37 cents a share on $1.08 billion in revenue for the first quarter.
For now, it looks as if the core business is slowly but surely turning around, despite most of the attention being paid to Chinese Internet giant Alibaba, which Yahoo! owns a 24% stake in, and for good reason. For the quarter, Alibaba earned $1.36 billion in net income on revenue of $3.058 billion, a year-over-year rise of 110% and 66%, respectively. Alibaba is expected to go public later this year, and could file its F-1 as soon as next week.