Yahoo reported revenues of $1.58 billion for the quarter ended march-09 down 13 percent YoY.
The Net Income too tumbled down to $118 million down 78 percent YoY ,although previous quarter had an extra-income component of $401 million gain from an investment in Alibaba.Absent those proceeds, Yahoo’s first-quarter profit would have declined 16 percent.
Display advertising revenue dropped 13 percent and Search advertising revenue fell 3 percent, reversing double-digit growth in previous quarters. For its current, second quarter, Yahoo said it expects to report between $1 billion and $1.2 billion in net revenue.
The results were followed by the decision to lay off 5% of its global workforce of 13500 employees.The layoffs announced will be the third round in just over a year and would take the numbers to 3,175.
Although Yahoo’s failed miserably to impress the analysts with the results but still managed few points with the enthusiasm showed by Carol Bartz, CEO who took over the reins from Jerry Yang in a bid to turn the ailing search giant around.A
Bartz was optimistic with Yahoo’s current performance.she said,“Yahoo is not immune to the ongoing economic downturn, but careful cost management would allow our operating cash flow to come in near the high end of our outlook range.” she said.
She further added,“While we experienced pressure in both display and search advertising in the first quarter, we believe Yahoo remains one of the most compelling advertising buys on the internet and Search is a very valuable business for Yahoo.”
Currently yahoo is dabbling on a strategy of doubling down on winning properties and discontinuing products that generate limited user interest.Although this strategy may give it windfall gain in short-term but may severely hinder future growth as it would be loosing businesses of future potential.
The analyst are very much expecting Yahoo to strike a search partnership with microsoft although they are skeptical about outright sale of search business by Yahoo.The search partnership could improve yahoo’s fortune in search business.
Yahoo should focus more on user improvement on the Homepage, Mail, Sports, Finance, and Mobile verticals.These services alone attracts billions of page views and bring in more Ad revenues.
On the Advertising front Yahoo is still counting on its APT platorm to usher in big amounts which it feels would help advertisers to buy display ads across multiple sites and for publishers who holds significant advertising space to sell to find demand for it.
