Revenue slump continues for Yahoo

Yahoo slipped further behind in the online advertising race during the fourth quarter as the internet company entered the fourth year of a revenue slump.

The results marked the latest in a succession of disappointing performances. The persisting malaise led to the firing of Carol Bartz as chief executive four months ago.

Yahoo recently replaced Ms Bartz with PayPal executive Scott Thompson, making him the fourth chief executive in less than five years to try to snap the company out of a slump that has depressed its stock.

Mr Thompson, who was hired just three weeks ago, promised to move quickly to fix the problems.

“There is no question we need to do better and we will,” Mr Thompson assured analysts in a conference call.

The company earned $296 million, or 24 cents per share, in the October-to-December period. That is down 5 per cent from $312 million, or 24 cents per share, a year earlier.

The earnings matched analysts’ estimates, but the company missed Wall Street’s revenue target.

Fourth-quarter revenue dropped 13 per cent from the previous year to $1.32 billion. After subtracting advertising commissions, Yahoo’s revenue totalled $1.17 billion, or $20 million below analyst projections.

It is the 13th straight quarter that Yahoo’s net revenue has declined from the prior year.

Although Mr Thompson said it was still too early to share precise details about his turnaround strategy, he said he will close some Yahoo services.

That could mean layoffs. Yahoo added 400 employees in the fourth quarter to end the year with 14,100 workers. It lost one of its co-founders last week when Jerry Yang resigned from the company’s board and gave up his role as “Chief Yahoo”.

Ms Bartz had also closed or sold some of Yahoo’s less popular services while jettisoning jobs to cut costs and sharpen the company’s focus.

Those moves, though, did not increase Yahoo’s revenue or stock price, leading Yahoo to fire her in September with more than 15 months left on her contract.

Besides closing services, Mr Thompson said Yahoo will expand into some fields where he sees opportunities to make money. He did not elaborate on that or on which services to close.

AP