Yahoo has issued a weaker-than-expected first-quarter sales forecast, as the online media giant announced its second round of layoffs in six weeks, of about 1 percent of its global workforce. Yahoo Inc warned that revenue will again slide this quarter as it bleeds traffic to Google and Facebook and as a much-touted search partnership with […]
Yahoo has issued a weaker-than-expected first-quarter sales forecast, as the online media giant announced its second round of layoffs in six weeks, of about 1 percent of its global workforce. Yahoo Inc warned that revenue will again slide this quarter as it bleeds traffic to Google and Facebook and as a much-touted search partnership with Microsoft Corp fails to deliver quick results. Yahoo reported its third consecutive quarter of declining page views on its websites.
CEO Carol Bartz, who after two years in charge is facing increasing pressure to turn the once-dominant Internet portal around, promised investors that revenue growth will return in 2011’s second half once its tie-up with Microsoft takes off.
The company’s shares slid roughly 2 percent in extended trading following the earnings report.
In contrast, rival Google Inc said it is preparing its biggest year of hiring ever in 2011.
Yahoo has struggled to contain costs and jumpstart revenue growth, but Bartz said on Tuesday the company was committed to investing to grow the company and defended the company’s progress during Tuesday.
“I will not back down on the fact that we are getting momentum,” Bartz said defiantly when an analyst contrasted the company’s declining revenue with executives’ claims of progress.
“There is a lot going on here,” she said, citing new features in the company’s Web search product and the successful combination of Yahoo’s search advertising service in the United States and Canada with Microsoft in October.
Under the ten-year deal, Yahoo will share 12 percent of its search advertising revenue with Microsoft.
Yahoo executives acknowledged on Tuesday that the hoped-for revenue boost from the search partnership had not yet materialized, but stressed that the company expected revenue-per-search to begin to grow later this year.
Since taking the reins in January 2009, Bartz has cut costs at Yahoo and shed underperforming properties, while increasing Yahoo’s operating profit margin, which reached 14 percent in the fourth quarter, compared with 7 percent in the year-ago period.
Yahoo is one the most popular destinations on the Web and the No. 1 provider of online display ads in the United States, but the company is facing increasing competition from social networking service Facebook and from Google.
Yahoo said its net income in the fourth quarter was $312 million, or 24 cents a share, compared with $153 million, or 11 cents a share in the year ago period. Analysts polled by Thomson Reuters I/B/E/S were looking for 22 cents a share.
Yahoo shares were down at $15.67 in extended trading after closing out the regular session at $16.02.
