When Yahoo reports Q4 earnings, only one thing will matter

Embattled Internet pioneer faces another moment of truth after market closes Tuesday

Shortly after the final trading bell Tuesday, around 4:02 Eastern Time, Yahoo will release its fourth quarter results. And trust me, Wall Street won't much care about earnings, operating margins, search market share or CEO Carol Bartz's bluster. Investors really will only want to know one thing: Has Yahoo finally been able to kickstart revenue growth after seven successive flat quarters? (See link below for details.) (Also see: Hey investors, Yahoo's still not growing revenue) The Wall Street Journal speculates that the surge in online display advertising reflected in Google's Q4 results announced last Thursday -- results many people glossed over because of the bombshell news that CEO Eric Schmidt was stepping aside -- bodes well for Yahoo. WSJ quotes an analyst: "You're seeing a recovery in online growth rates, be it retail or advertising, that are getting back to prerecession levels," says Citigroup Internet analyst Mark Mahaney. "It's hard to see why Yahoo wouldn't benefit." Maybe. WSJ writer Amir Efrati opens his article by observing that "rising tides can lift even leaky boats." I'd say it depends how big the leak is. Between Google's continued dominance in search and Facebook's rapid ascension as an Internet destination, Yahoo's fall into second-tier status shows no signs of ending anytime soon. Certainly its decline hasn't been as sudden and precipitous as Myspace's, but that's hardly a sufficient salve for investors who want to see revenue growth, which is an absolute prerequisite for increasing share price. Part of the problem for Yahoo, of course, is that it no longer has a strong identity, other than as a company from which you can expect a big round of layoffs every year or so. Google owns search, Facebook owns social networking, Twitter owns microblogging, Groupon is emerging as the top online purveyor of consumer discount deals. And all are rapidly growing revenue. Yahoo isn't. That's a tough story to sell to Wall Street. But in a few yours, Yahoo gets another chance. We'll see what happens.

Chris Nerney writes about the business side of technology market strategies and trends, legal issues, leadership changes, mergers, venture capital, IPOs and technology stocks. Follow him on Twitter @ChrisNerney.

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