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Yahoo! net profit jumps, revenue slips
AFP - Wednesday, January 26
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SAN FRANCISCO (AFP) - – Yahoo! reported Tuesday that its net profit more than doubled in the final three months of last year, despite a slip in revenue due to its online search deal with Microsoft.
Yahoo! made a net profit of $312 million on gross revenue of $1.52 billion in the recently-ended fiscal quarter, as compared to $153 million in net profit on revenue of $1.73 billion in the same period a year earlier.
"We just completed a very encouraging quarter and year for Yahoo!, where we saw our plans to turn around the company gain momentum," Yahoo! chief executive Carol Bartz said in a release that accompanied the earnings results.
Her upbeat comment came on the same day that Yahoo! said it was laying off one percent of its workforce, or some 130 employees, in the latest job cuts at the struggling Internet portal.
The company announced in December that it was cutting some 600 jobs in its third wave of layoffs since late 2008.
Bartz said that overhauling staffing was part of a reorganization that promises renewed glory for the struggling Internet pioneer.
"These actions are planned and necessary to eliminate duplication and redirect investment to our core products and strategy," she added during an earnings conference call.
"I guarantee you we will exit the year with more people," she continued. "We are going to hire in prioritized ways... making sure we have the right people in the right places."
Yahoo! has been seeking to carve out an identity to compete with Google and Facebook on the Web.
"I think the most important thing that the Facebooks, Yahoo!s and Googles can do is get (advertisers) online," Bartz said when asked how the competitive landscape was shifting.
"There is room for everybody because we are serving different parts of the Internet value chain."
Bartz said the goal is for Yahoo! to be a digital media company that personalizes online content to each visitor's individual tastes.
"The vision really is to serve up 630 million different sites so each different user has a personalized digital experience," she added.
"Then we can match the right advertising to the right people."
She expected Yahoo! to gain online search volume at its properties by the end of the year as the market adjusts to changes brought about by the Microsoft deal.
"Yahoo! and Microsoft continue to work very well together," Bartz said.
"We remain confident in the value of the alliance and its financial benefits."
The deal puts the cost of mining the Web for search results on Microsoft, leaving Yahoo! to concentrate on tailoring content to the interests of its more than half billion users around the world.
Yahoo! websites will be available in 47 languages by the end of the year, instead of the current 20, adding new markets, according to Bartz.
Display advertising at the core of Yahoo! revenue grew 17 percent in the last quarter, but money from ads was shared with Microsoft under the terms of a deal that has Bing powering online searches at the California firm's websites.
"We completed the important North America search transition to Microsoft on schedule and with high quality," Bartz said.
Bing is expected to begin powering search in countries outside of North America this year.
Microsoft gets 12 percent of Yahoo!'s net revenue, which accounts for money paid to websites that route Internet traffic to Yahoo!, in markets where the Bing transition has taken place.
Yahoo! revenue minus "traffic acquisition costs" was $1.21 billion in the final quarter of last year as compared to 1.26 in the final three months of 2009.
The firm expected net revenue for the current quarter from $1.02 billion to 1.08 billion, with Microsoft's share of the take amounting to approximately $36 million.
Yahoo! stock price was down more than two percent to $15.61 a share in trading that followed release of the earnings results.
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