Yahoo released its Q2 earnings a little while ago. What they show is low double-digit growth in certain revenue categories, but also decreases in selected areas (e.g., operating income, free cash flow). Revenue and operating cash flow described as consistent with the “midpoint of guidance.” Here’s the earnings release (PDF file). Below are some additional details. Google releases earnings on Thursday.

In his earnings call remarks, new CEO-co-founder Jerry Yang promises to do what’s necessary “to win” and that there will be “no sacred cows.” He discussed better leveraging Yahoo’s “ecosystem,” greater “openness” and becoming the “partner of choice.”

Yang also promises that Yahoo will invest in critical areas, deemphasize underperforming areas of the business and promises “greater emphasis on technology” and “faster decision making.” He also made comments about strengthening the internal culture and restoring the confidence of employees. New executive hires and more personnel changes are reportedly on the way.

Decker is emphasizing that second half revenue will be lower than expected. She also emphasizes the urgency of Yahoo’s “transformation.” She adds that personnel changes are necessary and a sign of Yahoo’s commitment to improved performance and its “evolution.” She talks about continuing simplification and streamlining of the organizational structure to speed decision-making. An example is the combination of search and display advertising in a single organization.

Decker reports that the Panama rollout is going well, with double-digit “RPS gains” (revenue per search) in the US. She also cites SmartAds (behavioral/customized ad targeting), RightMedia (for non-premium ads), the newspaper consortium (400+ papers now), Yahoo Go (mobile) and the eBay relationship as highlights and examples of progress and success.

Postscript From Danny: Yahoo! Q2 2007 Earnings Call Transcript provides a written transcript of the earnings call, and Techmeme has related discussion from across the web about the earnings here.

Also, the new Panama ad system had been widely positioned as something that would boost Yahoo’s revenues. Last quarter, analysts were disappointed it didn’t do better, but Yahoo said to give it another full quarter. Looks like that worked. From the New York Times:

Among the few bright spots for Yahoo was the performance of Panama, a long delayed overhaul of its search advertising system intended to narrow the gap that Google has in that area. Yahoo said that Panama, which was introduced in the United States in February, had delivered revenue gains of 15 percent to 20 percent for every search and was expected to continue to perform at those levels for the remainder of the year. The company said that gains from Panama could extend further, as the new system was introduced in more countries overseas.

But those gains were obscured, in part, by weakness in display advertising — the banners and other graphical ads that are a ubiquitous presence on Yahoo pages.

Related Topics: Yahoo: Business Issues

About The Author: Greg Sterling is a Contributing Editor at Search Engine Land. He writes a personal blog Screenwerk, about SoLoMo issues and connecting the dots between online and offline. He also posts at Internet2Go, which is focused on the mobile Internet. Follow him @gsterling. See more articles by Greg Sterling