Yahoo just announced third quarter earnings. Revenues were flat, up one percent to $1.79 billion. The company met consensus earnings estimates of $0.09 a share. CEO Jerry Yang on the conference call says that yahoo will lay off “at least 10 percent by year end.” That’s 1,500 people, as expected. (Yahoo ended the quarter with 15,200 employees). And that might not be all. He calls he headcount reduction a “first step” and that “additional structural changes” may be taken in 2009 and beyond.
On the Google search deal, he says “We are continuing to work with the DOJ.” So no progress there.
Yahoo’s revenues from search increased at a still-healthy 17 percent clip year-over-year, but revenue growth from display ads slowed to 3 percent (compared to 11 percent growth in the second quarter). Affiliate revenues declined 10 percent. President Sue Decker says in 2009 Yahoo “expects slower ad growth in 2009,” but advertisers are consolidating around market leaders and yahoo hopes to “capture share from the top global brands.”
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YHOO is a classic example of management failure. There were multiple opportunities of nice exit for shareholders. Instead, the management run this company to the ground. This is watching a slow-motion train wreck. I would be surprise this company ended up in Deadpool.
I bet they are wishing they took to $33 per share now
A given, but a bummer to finally read/see it.
They’re going to end up settling and selling to microsoft for much less than the 33/share that was offered earlier this year. sad story.
Peter
http://www.thewebwar.com
MSFT should offer $12 per share all-cash and also stipulate that any Yahoo employee laid off in the next 24 months will receive 24 months severance. This will be cheaper than any premium MSFT has to offer and Yang will have an internal revolt on his hands….with all employees wanting security over Jerry.
Great assets + brilliant people + terrible senior management = turnaround play.
Look at another fallen angel: GE in 1980 traded around $1 per share with a market cap of $12b and a net margin of around 6%. Welch was promoted to CEO and the rest is history.
All Yahoo needs to send its stock soaring now is to find a disciplined, no-BS CEO like Jack Welch.
“All Yahoo needs to send its stock soaring now is to find a…CEO like Jack Welch.”
And all I need is a billion dollars and Megan Fox as my girlfriend.
He calls he headcount reduction a “first step” and that “additional structural changes” may be taken in 2009 and beyond.
I’m sure these steps will not affect those people that rejected the $35 sweetheart deal from MSFT. Get a brain morans
People. Yahoo rejected an UNSOLICITED $33/share evaluation. Yahoo isn’t doing well, but it isn’t racking billion-dollar losses neither.
Good move. Google makes $1.2 million revenue, 300k income per employee, Yahoo makes only 500 k, 30k income per employee. But, trimming employee isn’t going to help it Yahoo doesn’t realize that its attraction to page-views and display ads is bringing it down.
“Additional structural changes may be taken in 2009 and beyond?” Well, there’s an incentive for talented employees to stick around! I hear yet another rush for the door at YHOO.
..
Yahoo has just begun an aggressive new Yahoo Search promotion on TV, radio and magazines.
If this works, it may be their savior.
The ads are good and convincing.
People won’t abandon Google, but some just may try Yahoo rather than going to the 2nd or 3rd page SERPs.
We know people who do that now
Ah yes, an “aggressive” new offline “promotion” - that’s sure to save the day for Yahoo.
What Mogilny said. This is not a failing enterprise: it’s on track to generate nearly *$2 billion in operating cash flow* this year, even after growing its headcount by nearly one-third. Nothing that disciplined, smart senior mgmt can’t cure.
When looking at Yahoo, you have to ask yourself if the glass is half empty or half full. Yahoo is much more profitably than many companies with similar revenue streams and they have a lot of great products and services. But in terms of achievement, Yahoo pales in comparision. In other words, they are doing okay, but could be doing a LOT better.
Right now, there management is unfocussed and they continue to lose talent. Things might turn around, but Yang is not the answer.
Come on…. we have not lost talent…. jerry is still with us
Since Q1-07 they increased headcount quarter over quarter. Whats the point in hiring 3500 more people when your going to fire 3500 anyways!! Retards, great fucking management skills at yahoo.
@Eric,
You must be pissed that your post only got 25 comments while Arrington posted the exact same story - but gets 182 comments.
Take it to the streets….
I used to be a Yahoo stockholder on the theory that it was very overlooked (being in google’s shadow), and that its huge amount of “real estate” was eventually going to realize value. At this point though, who knows how their assets, such as their huge web communities (flickr, etc) are going to be leveraged.
Got out at $30 fortunately, never looked back.
Sorry to hear about the layoffs, its going to be an interesting next year or so with so much talent in the tech and financial sectors on the market…
-AJ
http://freeagents.ning.com
(Shameless plug: Check out my site — a social net of sorts for people who have recently lost their jobs. Mainly a place to figure out “what next” whether that be another job or just a break to have so free time/fun)