Yahoo posts loss, revenue falls slightly

Yahoo recorded a loss in the fourth quarter, with revenue of $1.37 billion, which is down 2 per cent.

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Yahoo recorded a loss in the fourth quarter, with revenue of $1.37 billion, which is down 2 per cent.

The new CEO, Carol Bartz, appointed two weeks ago, said, "I've encountered a wonderful energy, a real can-do attitude, a robust product pipeline and a tremendous dedication to making the experience of our users and advertisers the best they can possibly be.

"To be sure, there are also fundamental issues that need to be addressed: sharpening our strategic focus, improving the pace of decision-making and continuing to streamline the business," she added.

"I intend to move quickly to tackle these core issues and capitalise on all the incredible opportunities that exist at Yahoo."

Revenue was $1.81 billion, a 1 per cent decrease compared to 2007's fourth quarter.

Subtracting the commissions it pays to its ad network partners, Yahoo had revenue of $1.37 billion, down 2 per cent but in line with the consensus estimate from analysts polled by Thomson Reuters.

Yahoo posted a net loss of $303 million, or $0.22 per share, compared to net income of $206 million, or $0.15 per share, in 2007's fourth quarter.

On a pro forma basis, which excludes certain items, net income was $238 million, or $0.17 per share, $0.04 per share above the analysts' consensus expectation.

The fourth-quarter results have generated particular interest because they are the first after Bartz took over. Bartz replaced Jerry Yang, who announced his intention to step down in November after his tenure as CEO, begun in mid-2007, failed to turn around the company he founded. He stayed on as “Chief Yahoo” and as a board member.

Bartz said she didn't arrive at Yahoo with preconceived ideas about what needs to be done, and that she's still learning about the company "and working my way through that thought process."

Talking about a sale or break up of the company, she said, "Did I come to Yahoo to sell the company? The answer is 'no'."

Bartz did promise to rationalise Yahoo’s complex organisational structure.

"We need to bring more clarity to our strategy, feed innovation, be maniacally focused on our users and their experience, and always remember that great products will bring users and advertisers to Yahoo," she said.

CFO Blake Jorgensen said that Yahoo had implemented a variety of previously announced cost-cutting measures in the fourth quarter, including about 1,600 layoffs and consolidation of facilities.

He said Yahoo does not expect a massive cost-cutting plan in 2009, but said the company will continue looking for efficiencies. Yahoo ended the fourth quarter with 13,600 employees, down from 15,200 at the end of the third quarter.

For the full 2008 year, revenue was $7.21 billion, up 3 per cent compared to 2007. Subtracting commissions to ad partners, revenue was $5.40 billion, up 6 per cent.

Net income for 2008 was $424 million, or $0.29 per share, compared to $660 million, or $0.47 per share, for 2007. Pro forma net income was $642 million, or $0.46 per share, compared to $652 million, or $0.46 per share, for 2007.

For 2009's first quarter, Yahoo expects revenue between $1.52 billion and $1.72 billion, and operating cash flow between $365 million and $415 million.