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Yahoo profits drop, 1000 employees will be fired

Posted by Yaser on February 2, 2008

After announcing a sharp drop in fourth-quarter profits Tuesday, Yahoo issued a disappointing outlook for this year, suggesting that investors would have to wait until 2009 for a turnaround. Yahoo also said that as part of its plan to revive its fortunes, it would cut 1,000 jobs by mid-February to reduce costs and narrow its focus to its most important businesses. The company, however, said it planned to invest aggressively in some areas, like advertising technology and selected portions of its Internet portal, as it tries to capture a larger share of online ad dollars. Since some laid-off employees could apply for new jobs at Yahoo, the net effect on the work force, which recently grew to 14,300, was not clear.

Jerry Yang, the chief executive, warned investors of “head winds” this year. Yahoo’s projections for revenue growth and profitability in 2008 were either at the low end of analysts’ expectations or below them. Yahoo said that its fourth-quarter net income fell to $206 million, or 15 cents a share, down 23 percent from $269 million, or 19 cents a share, in the same quarter a year ago. Revenue grew 8 percent to $1.8 billion. Excluding commissions paid to certain advertising partners, revenue was $1.4 billion, in line with analysts’ expectations. Mr. Yang, the Yahoo co-founder who was named chief executive last summer amid growing shareholder discontent, has promised to focus on three objectives: becoming a starting point for consumers on the Web; making the company a top choice for marketers seeking to place ads on sites across the Web; and opening Yahoo’s technology infrastructure to third-party programmers and publishers. It looks Google is really becoming a dominant search engine with no real competitors.

Source: Washington Post, NYTimes
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