More loss, more layoffs for Yahoo under Bartz

April 21, 2009 | Camille Ricketts | Comments |

Yahoo reported that revenue and profit fell during the first quarter — the first full quarter under new chief executive Carol Bartz. In response, the company plans to trim its workforce again, this time by 5 percent to cut down on expenses.

The search giant’s net income for the first three months was $118 million, down $542 million from last year at this time, representing a 78 percent decline. If you subtract the $401 boost it got from an investment in a Chinese peer company, its profits still dropped by 16 percent — not a small figure by any means. Yahoo pegged its revenues for the quarter at $1.58 billion, down from $1.8 billion last year, a 13 percent drop. This data is pretty much what analysts had anticipated, but is still disappointing news for the company, which continues to struggle against its more formidable rivals, namely Google, which reported 10 percent growth in earnings last week.

To further lighten its load, Yahoo predicts that it will cut 680 jobs out of its workforce of 13,600. This will bring its layoff count in the last two years to over 3,000 employees. Taking it one step further, the company is even considering selling off some of its more central assets — like Yahoo HotJobs, Yahoo Personals, and several others that haven’t been performing as well as anticipated. There are also rumors that it will shed some of its Asian properties, like its 10 percent stake in Korean e-commerce company Gmarket.

While the company’s display ad business continues to spiral downward (a common problem for its competitors as well), analysts say its core search business has stabilized, perhaps making it more appealing once again to Microsoft. Whether Bartz will pursue this option aggressively remains to be seen.

For now, Bartz seems to be clinging tight to her fierce optimism, going as far as to call Yahoo “immune to the ongoing economic downturn.” Her prescription for the future: prudent cost management — which, at this juncture, seems to mean throwing as much as possible overboard to keep the ship afloat.

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About the Author, Camille Ricketts

Camille is the lead writer for GreenBeat. She came to VentureBeat from Google where she worked on its traditional platforms team, particularly in TV. Before that, she was a reporter for the Wall Street Journal in New York and London. Follow her on Twitter at @camillericketts, and follow VentureBeat on Twitter at @venturebeat.

With GreenBeat 2009, VentureBeat's all-star conference on all things Smart Grid, coming up in November, Camille will be expanding coverage of this exciting space. Stay up to date by following @greenbeat2009 on Twitter or by becoming a fan of the event on Facebook here.

  • Memo: Sell to Microsoft already!
  • chleoku
    I think yahoo does need to figure out a clear strategy (other than planning for sales to MSFT). I think Carol has the discipline and ability:

    http://www.wealthalchemist.com/Blog/2009/01/yah...

    but Yahoo fate really depends on the clear positioning in the Internet Marketing game. With this position, a proper scale down on the product side is necessary