After spending a lot of time speaking with Yahoo employees, partners, and customers, new CEO Carol Bartz has come to realize the importance of giving consumers a “Wow experience,” she told investors in the first quarter conference call. But they have yet to experience that from owning the stock. Yahoo reported a 13 percent decline in revenues for the first quarter of 2009 to $1.6 billion, while net income dropped 78 percent to $118 million.
Google, in comparison, last week reported a 3 percent decline in first quarter, but was able to manage a 9 percent increase in net income. Update: As a comment points out, Google saw a 3% decrease in revenue from Q42008 to Q12009, but saw a 6% growth year over year for Q1. Yahoo saw losses for both metrics.
Diving into the numbers, total online advertising revenues were down 12 percent. Breaking it down even further, search advertising revenues on Yahoo sites declined 3 percent to $399 million, while display advertising on Yahoo sites declined 13 percent to $371 million. The biggest decline, however, was from affiliate ad network revenues, which were down 16 percent to $511 million.
Page view growth also slowed down to 8 percent from 20 percent growth a year ago and 15 percent growth during the fourth quarter. On the search side, query volume grew but revenue-per-search declined as commercial queries and click-through rates saw weakness. Bartz puts a positive spin on Yahoo’s results and claims that it is actually gaining share of advertising dollars compared to the overall industry:
I think our search results, . . . it is like online window shopping, people are grazing around, just not clicking to buy. Marketing budgets have been slashed a heck of a lot more than any declines in these metrics. It is my belief that we must be gaining share.
Bartz announced another round of layoffs, which will affect 5 percent of the workforce, or about 675 people (out of 13,500). The cuts will take place within the next two weeks. Bartz also indicated during the conference call that she is focusing on the products and properties which drive the bulk of Yahoo’s traffic and revenues, including the homepage, Yahoo Sports, Yahoo News, Yahoo Finance, Yahoo Mail, and Yahoo Mobile. Her three-pronged strategy is to globalize the platform, build “fantastic products to deeply engage users, and to improve the return from its advertising platforms.
Asked about discussions with Microsoft, Bartz had no comment. Later on she did manage to drop the F-word, though (but quickly apologized for the slip). The exact quote, said at the end of the Q&A in frustration over all the layers of extra management at Yahoo, was:
There were engineers in almost every country, and way too many product people. We had one product management person for every three engineers,We had a lot of people telling engineers what to do but nobody fucking doing anything. Excuse me. I knew that would slip out one of these times.
And that was just her second conference call as Yahoo CEO.
Erick,
Thanks for the article. I’m doing some research and trying to find revenue growth data (or paying members) for sites like LinkedIn, Facebook, CarDomain or others.
(Seeing the Yahoo data in your article made me think to ask … though I know they are public and more such data is available)
Where do you go to find such data? Searches bring up lots on valuations, members and site visitors but little in the way of revenue data.
Any suggestions would be appreciated.
Cheers,
Mike
Mike, Yahoo is a public company.
When will yahoo learn? Recession or not yhoo is sinking.
They’re on the right track. They need to fire more people and become profitable. They have a great brand and lots going for them, but to date they have been probably the most mismanaged big company out there. And stop complaining about the language she uses. Everyone involved in the conference call is an adult. Act like one. (Looking at you Mr. Erick with an extra K for originality).
Yahoo!’s main product has always been their email service. Speaking for the general population, yahoo mail is most likely the only reason people visit yahoo.com. If yahoo doesn’t work to improve spam filters and social features, they will become a has been like so many other internet companies. Gmail is consistently steeling their market share, and from my experience with Gmail, it is head over heels a better email service than yahoo mail.
ji, I’ve indicated that in the middle paragraph of my reply above, what i’m really looking for is data on revenue growth of social networks like LinkedIn, Facebook, CarDomain and others.
Any idea where to get this kind of info?
This is a business strategy.. They will layoff now and they will recruit when the situation changes.
yahoo is past saving, but it should be obvious that bartz is no more clued in than terry semel when it comes to actually growing web properties.
about the only thing she has done right is to do the layoffs in small measures…don’t want to shoot that wad all in one go. yahoo is going to get to 5000 employees before this recession ends, and bartz is smartly getting there in small increments so she can keep serving wallstreet petit fours until she cashes out herself
Yahoo needs to do something drastic. They need to find strategic differentiation. You cannot beat Google, so you need to do something Google does not do.
They should adopt a strategy like Yauba or just buy out Yauba and incorporate some of their technology innovations into their search engine.
Do u hold company shares of Yauba or r u one of the SE involved in that project. Where does yauba come from??
What are the features of Yauba, can u plzzzz describe.
Yes, they need to do something unlike Google, so they need to invest more in search. Good one!
If this was four years ago and it was an article about HP, the comments would be more or less the same. aside from the fbomb comments.
HP turned it around. They had too many assets lots of waste. CEO 101, cut the fat. In parallel develop a new strategy. Yahoo can differentiate from Google by providing more custom advertising services, buy an ad agency become vertically integrated marketing company. Custom palm location based apps, they need to get a hold of the handheld market to survive.
There are many opportunities, they have enough of a user base and assets to capitalize. Although if yahoo doesnt change it will be AOL.
She is completely unimpressive. Deadpool her. Very weak vision, engage the users, blah, blah, blah
Then knocking her own employees, she sounds totally disconected from her own stewardship. I wouldn’t be willing to fight for her if I worked a yahoo, dismal future indeed.
yep.. that’s what happened when you bring the ’smartest’…
may be, if she stop doing stupid moves (e.g. closing farechase?!) she will start moving this giant forward.
J.
–
http://twitter-...zz.blogspot.com
CLOSING FARECHASE was stupid!!! but then again yahoo has a history of stupid moves…
If Yahoo wants to improve their revenue from paid search they really need to 1) improve their online interface and 2) create an offline tool like AdWords Editor that allows us to work with big accounts.
isn’t “WOW” MSN’s mantra?
should be crying wheres the “HYPE” . yah00 has no hype. since TC’s not talking about Jerry any more what else is there to talk about. Y’s offerings are a pennies a dozen. they appear to have no strategic social network presence or agenda.
one good “Universal Search-Social Network” with a bunch of integration plug in apps can do anything a user can possibly think of on the internet. all in one “Personalized Presence” place. what kind of personalized presence can yah00 offer? the next big startup in search will give users and businesses strategic niche personalized location based services.
L00Klocator.com – see yourself
Just to compare apples to apples here:
- Google’s 3% revenue drop was between Q42008 and Q12009. Google revenue was up Q12009 to Q12008
- Here, yahoo’s revenue has drop both quarter over quarter and year over year.
i would too if i was running yahoo…
Yahoo is an unethitical company. Violate so many human right issues. It’s about time the company die! Die Yahoo die!
Piece of crap doesn’t deserve to live.
bye bye yahoo … can’t wait to see this piece of shiet go down to $250M a quarter.
Bullshit aside, it’d be cool if they partnered up with comcast to increase their branding/credibility . (or hire their advertising agency)
Classless old bag.
Do you guys know which Yahoo department will has the most layoff?
I’m a fan of the F-Bomb, more so than most people. But would you want to work for a public company whose CEO drops the bomb on an earnings (losings) call? Not me. Zero class.
Totally agree. Things like that are not accidental unless she has a really habitual F-Bomb habit. It’s small transgressions like these that make me begin to question her judgment with more important things. I think of this as a ‘tell’ about her management style and abilities. It shows a lack of judgment, cavalier attitude or an effort to impress. Any of those is check in the bad column.
She’s got a reputation for dropping more than one little F-bomb. Apparently she showed great restraint on the call.
But if she can turn the company around who gives a shit if she needs to say fuck it to do it. i’d rather make money with a bunch of fucks than lose my shirt with gosh, golly, and gee.
I like the “classless old hag” comment: it was a great way to take away your own podium, burn it and bury it.
Not sure what the problem is with the F-Word: have heard more than a few male CEOs use it. Why is it wrong this time ?
Knowing what words to use with which people is part of what determines how well you lead. I don’t have a problem with the word ‘fuck’, but this is about knowing when to use it. Using it on an earnings call on a very wide audience is dumb. Just stupid. Silly woman. Not smart at all.
Why not actually open up YPN and destroy Adsense. That’s what Microsoft’s next move is going to be. If you’re going to clean up an affiliate program you had better get real about retaining the best of the best (affiliates). Revealing actual (guaranteed) rev share would help Yahoo gain a huge amount (if not the majority) of the market.
Because Yahoo is clueless. They just want to milk the company for cash.
In the words of Carol, “Fu-k users & customers”
I always make a mention of the YPN failure to open on all Yahoo posts here. It is their single largest failure. If they would have done this 3 years ago, they could have muted Google’s growth and improved their own. It looks like MS is poised to pluck this cherry from them. MS will have a good chance of forcing them into the number 3 position.
Yahoo is a dying company.
Who can benefit in the interim till the final nail in the coffin? The Management.
Go Carol go. swindle it.
Carol Bartz is looking for World of Warcraft?
Why not integrate WoW Auction Houses into Yahoo! Mobile?
only 5% layoffs will not change anything! especially at yahoo!, where hundreds will be hired in the coming quarters.
they should layoff 30% of the employees, become a lean company, keep their kick-ass engineers and reign again the internet.
Can anyone explain to me why an internet company with barely 13 Billion of equity is buying 1.2 Billion in short term debt securities [and subsequently selling off 1.04 Billion of those securities in the same quarter] when they usually buy about 35 Million a quarter? Did they mention this in the CC? You can find this info in the 8-K under Investing Cash Flows [last page] if you want to look.
Bartz is NOT all that..LOL
F-Word?
What F-Word? There are many!!!
Fagot – Like in Perez Hilton
Fuck – Like what Yahoo will be doing to 675 employees
Fingered – See #2
Fuzzy – Like bailouts to banks & car companies
Flatulence – like eating too much at PF Chan’s
Facial – Like what Aria Giovanni will get from me.
Fascist – Like Larry Ellison on Prozaq
Please stop the PC mentality and tell us what word did she used!!!!
Fargin’ Fallopian Fumice!
Fired
I think Jerry wants to f-word Carol
flickr?
I think most people will remember her colorful language more than finding any real turning point for the company.
In my analysis, YHOO has reached a point of no return. YHOO is so yesterday. Internet properties rise and fall like empires. It was cool once and now few people even bordered to go to the site, except occassionally email and finance. Now, it is so uncool! It’s like your grandma fashion. YHOO is heading to deadpool.
just heard the audio call. carol is allright. she knows waste when she sees it. its a tough job to make the cuts but someone’s gotta do it. this is a great exciting time for yahope and their aggressive integration-innovation initiative.
its now official…….the “social-search engine” games have begun.
SwitchLocator.com – Flick It!
Cool naughty talk. And a nicely updated picture – a real CEOILF.
It’s about time we had some Palinesque good looks here in silicon valley. Meg Whitman reminded me of Barbara Bush and I always felt like Carly was going to stick a pencil in my throat if I made eye contact.
I can finally rip down those old Red Herring cover stories on Marimba off my dingy ybasement walls.
13,000 employees work for Yahoo, what the hell all of these people are doing? Come on, get real 5,000 should get you to where you need to go. Nimble is the name of the game, I recently looked and was shocked to see that Microsoft has 91,000 employees, innovation wise, I think that says it all.
I don’t think yahoo need a wow thing, they need to have an ad system that normal people can use, that has competitive pricing over Google’s overpriced CPC scheme, and that is beneficial to partners unlike google’s (which keeps all the money).
Yahoo need to somehow build themselves back into the center of the internet. To be good friends with facebook, twitter, itunes and what other things people like to use and through their successful services like finance, movies and weather to gradually introduce smart services that will bring people into the whole yahoo experience.
Yahoo had lost its relevance somewhere in 2006, I do hope they’ll come back because I’m afraid to stay by myself with Google. Competition is good for everybody.
I predict she would not last more than a year at YHOO. I don’t think she has the ability to turn YHOO around. If YHOO board thinks they brought her in to woo MSFT Steve Ballmer, Good Luck! Apparently, her habitual swearings do not help either.
Yahoo needs to do something special. They need to find a way to differentiate. You cannot beat Google, so you need to do something Google does not do.
So, whatever happened to the Yahoo Directory? Their directory of websites was the product that put them on the map in the first place. Of course, it turned out that searching to find specific information within websites was more powerful… but they totally let the directory stagnate. Done right, it would still be useful. Instead of making listings free, but carefully reviewing all listings to make sure each site is legitimate, and properly classified, they did the opposite.
Yahoo to layoff 675 http://url360.Me/5sJ
Nice article. First time I’m visiting techcrunch…got an alert from http://www.trackle.com
That Carol is not what she appears to be people!
She could have said “if you seek amy!”
I’ve been spending a lot more with Yahoo now for ads. Yahoo is much easier to get your ad campaigns going. Google offers a lot more tools and their interface is better, however constant Google slaps can be annoying for an advertiser. I rather get less but stable traffic for a long period of time.
I guess its too harsh to judge Carol so soon. Lets give her some time to do her thing. Perhaps Q2′09 results is the time when you can ask her if things are still bad at Yahoo!.
And I guess, as far as Google is concerned, Yahoo! Search is pretty close in relevance, its more about cult branding and brand recall when people talk about ’search’.
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Fire Yahoo Auctions back up again, and watch the money roll in as thousands of disgruntled ebayers flle for their lives from that rotting garbage dump.
Now that ebay is phasing out yahoo ads in favor of google, this is absolutely possible.
Carol! Do it!
Carol who? oh you mean carol bartz, the woman who said “she will kick some butt” to raise yahoo from the ashes but obviously failed?
or the other carol bartz who bitterly said, “Yahoo was never a search engine” when she knew in her heart that Google see right through the company.
Or the far-version of Carol bartz, the one Mr. Icahn called a “loser”?
I guess those 3 carol bartz looks the same to me
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