The financial status of Sunnyvale-based company Yahoo Inc went down further in the end of 2007 and as a result, the company has planed to lay off 1,000 of its employees.
However, Yahoo has not informed which areas of expertise would be reduced. It should be noted that Yahoo chucked out 650 employees way back in 2000 during the dot-com break down.
Yahoo Inc earned $205.7 million, this would be a 15 cents per share, during 2007’s final three months, a 23 percent drop from net income of $268.7 million, or 19 cents per share, at the same time in 2006.
With these bad statistics on Yahoo, analysts has alerted investors to expect the worst. The pessimism prompted analysts, on average, to project earnings of 11 cents per share for the period.
Revenue for the period totaled $1.83 billion, an improvement of 8 percent over $1.7 billion in 2006.
After subtracting commissions paid to its advertising partner, Yahoo’s revenue fell to $1.4 billion, in line with analyst estimates.
Yang, who returned as chief executive seven months ago, signaled the company has challenges ahead.
“While we will continue to face headwinds this year, we believe that the moves we are making will help us exit 2008 stronger and more competitive and return to higher levels of operating cash flow growth in 2009,” Yang said in a statement.
Excluding ad commissions, Yahoo estimated its revenue this year will range from $5.35 billion to $5.95 billion. The average analyst estimate stood at $5.92 billion, according to Thomson Financial.
Yahoo shares plummeted about $2.21, or more than 10 percent, in extended trading Tuesday after finishing the regular session at $20.81, up 3 cents.
Last year marked the first time Yahoo’s earnings have dropped from the previous year since the company lost $93 million in 2001 during the aftermath of the dot-com bust.
Unlike in 2001, Yahoo hasn’t stopped making money. But the company’s 2007 profit fell 12 percent to $660 million even though advertisers spent more than ever on the Internet, where Yahoo still draws one of the Web’s largest audiences.
The bulk of that additional ad revenue has been pouring into Internet search leader Google Inc., a company that was smaller than Yahoo just three years ago.
Yahoo has been struggling to attract teenagers and young adults who are gravitating to more trendy online hangouts like Facebook.com and News Corp.’s MySpace.com.