Amid plummeting ad revenues, global web portal Yahoo! yesterday cut its forecasts for sales and earnings in 2001 and announced over 400 job losses.
Chief financial officer Susan Decker blamed the group’s woes on the economic downturn in the US and the dramatic fall in adspend by dotcoms. Moreover, there appears to be no end in sight: “We still cannot say when there will be a recovery,” lamented chairman/ceo Tim Koogle.
Yahoo! announced that it expects 2001 revenues to total between $700 million to $775m, down from $1.1bn last year. It hopes to reduce its dependency on advertising, cutting the proportion of total revenue generated by ad sales to around 75%–80% by the end of the year – “a realistic target”, according to Koogle.
Responding to the fall in revenues, the portal declared that it would axe around 12% of its staff – some 420 employees out of a total workforce of 3510 – in a bid to save $7m–$9m per quarter. It also plans to cut marketing costs, end some services and consolidate others, adding that it would take a one-time charge of $40m–$60m in the second quarter.
Yahoo!’s Q1 results roughly matched expectations –revenues fell year-on-year from $230m to $180m, with a net loss of two cents per share, down from eleven cents in Q1 2000.
Meanwhile, yet another senior executive has decided to quit the portal – Heather Killen, senior vp–international operations will step down in June.
News source: Financial Times