Yahoo Slashing 10 Percent Of Workforce

Internet Giant Firing 1,500 Workers As Third-Quarter Profit Falls 64 Percent

(AP)  Mired in a deep slump, Yahoo Inc. will fire at least 1,500 workers to cope with a crumbling economy that dented its third-quarter profit and turned up the heat on the Internet company's management as investors stew over a missed opportunity to sell to Microsoft Corp. for $47.5 billion.

The purge outlined Tuesday represents a 10 percent reduction in Yahoo's payroll of about 15,000 employees. It's the second time in nine months that Yahoo has resorted to mass layoffs in what so far has been an ineffectual effort to rebound from a financial funk that has left its stock price near a 5½-year low.

Things got worse in the third quarter as Yahoo earned $54.3 million, or 4 cents per share. That was a plunge of 64 percent from $151.3 million, or 11 cents per share, at the same time last year.

It was far below the average earnings estimate of 9 cents per share among analysts surveyed by Thomson Reuters.

Revenue rose 1 percent to $1.79 billion. After subtracting commissions paid to advertising partners, Yahoo said its revenue stood at $1.32 billion - about $50 million below analyst estimates.

Yahoo shares gained 67 cents, or 5.6 percent in extended trading after ending the regular session at $12.07, down 79 cents.

The depressed stock price is particularly galling to Yahoo stockholders, given that the Sunnyvale, Calif.-based company had a chance to sell to Microsoft for $33 per share in early May.

But Microsoft withdrew its offer after Yahoo Chief Executive Jerry Yang balked at the price because he believes his turnaround plan would yield even bigger returns.

Yang's rebuff is now looking like a horrible mistake as online advertisers rein in their spending to save money in what is expected to be the worst recession in a quarter century.

Like most Internet companies, Yahoo relies on advertising for most of its profits.

Reflecting the downturn, Yahoo lowered its revenue estimates for the remainder of the year. Now Yahoo projects 2008 revenue of $7.18 billion to $7.38 billion - down from a forecast of $7.35 billion to $7.85 billion issued three months ago.

"We are going into what is very clearly a recession mode," said Blake Jorgensen, Yahoo's chief financial officer, in an interview.

The downturn hasn't derailed Yahoo's biggest rival, Internet search leader Google Inc., which said last week its third-quarter profit rose 26 percent.

But Yahoo is considered to be more vulnerable to advertising cutbacks because its marketing system doesn't work as well as Google's and it is more reliant on billboard-type ads that are less useful during tough times. Google, in contrast, specializes in text-based ad links that only cost advertisers when the ads are clicked on.

Yahoo has been hoping to boost its revenue by drawing upon Google's technology for some of the text ads shown on its Web site, but the proposed partnership is in limbo while the U.S. Justice Department investigates whether the alliance would undermine competition. Together, Google and Yahoo control more than 80 percent of the U.S. search advertising market.

[wl7bzh]

Gosh, ain''''''''t it awful.
DejaVue.
Back to the Clinton methods.
Beat up on anyone who opposes you.
Reinvent language to facilitate exhoneration.
Kill the messenger.
Call truth -lies.
Call lies -truth.
Evil is spun as good.
Good is spun as evil.
Politics is persued as if it were a football game.
Your side. My side. All good men.
Each side must ''''''''kill'''''''' the other side.
How pathetic we have become.
How young and foolish we are as a nation.
Oh, yes -powerful because of driving capitalism.
How curious and profound that we might choose socialism now and change all of that.
Weakened and vulnerable.
Deceived and betrayed.
Our own logic failing us.
History abandoned in favor of a failed ''''''''experiment'''''''' with communalism.
Everyone at "C" level.
Incentive gone and the sky turned ''''''''red.''''''''
How sad.
How very sad.

Posted by tuffone3 at 10:49 AM : Oct 22, 2008

Yea, I agree with you. The brown psilocybin shrooms are great!

[closethippy1]

Yahoo answers banned me for asking "provocative" questions.
I hope the **** who did it is one of the people they are ridding themselves of.
Posted by ocguy64 at 12:24 AM : Oct 22, 2008

I was looking for a post like this. Those freaking b.astards banned me because I mentioned a business and gave out its number because I like the products they sell.
I''ve been at Y/A for who knows how long, earned over 4500 points, and I have never mentioned a business before or done any kind of soliciting, ever.
All it took was for me to do it once and they threw the book at me.
I can''t believe I invested all this time and now all my points are gone.
I appealed their decision sometime ago by haven''t heard back from them and like ocguy64 I hope it''s because the Y/A SS troops were thrown out the window.

[longtree-2009]

Yang should have taken Microsoft''s offer. 10% reduction for 64% drop in revenue is not enough of a cut in headcount. If Microsoft still wants yahoo, it should make another offer but substantially less than previous offer. Major shareholders, owners, must be satisfied with profits because, after all, it is their money that keeps a business afloat. All employees of any business are expendable. Eventually, any employee can resign, retire or die so each employee can and will be replaced someway, somehow.

[hotwitch]

The likes of these companies (yahoo, youtube, facebook, google, etc.) are all smoke-and-mirrors success stories. They''ll all be penny stocks within two years.

[nothappyatall]

Things got worse in the third quarter as Yahoo earned $54.3 million, or 4 cents per share. That was a plunge of 64 percent from $151.3 million,"


They already MAKE a profit, it''s just that they didn''t make AS MUCH as they planned, so what?? they STILL raked in $54 MILLION DOLLARS profit in 3 months!

"had a chance to sell to Microsoft for $33 per share in early May.

But Microsoft withdrew its offer after Yahoo Chief Executive Jerry Yang balked at the price because he believes his turnaround plan would yield even bigger returns.
Yang''s rebuff is now looking like a horrible mistake "

Oh ***! now I guess Yang can take his typical $20 million bonus for running a company into the ground, and bankruptcy, good job yang!

[easeup-2009]

They cut their message boards--which were great.

I hope they go down...hard.

[rushlimpdrug]

Ten percent!

Damm!

That''s like, like. . .

Well, let me google it and I''ll get back
to you. . . .

[racinman86]

They are going to take peoples job''s just because they want to make a profit. When times are tuff like they are now, they should wait it out to see what happens, leave their people in place. Cut a few dollars from the higher ups to help the unemployment. So they don''t make a profit for 6 months to a year, as long as they break even is better than not to. People still have a job until this all passes. That is what is wrong with America today, everyone wants that all mighty dollar but to hell with everyone else that scrap to get by.

[tannerbird]

I hope they cut at the top that is where the deadwood''s at they get most of the money and do nothing. Its hard for the workers to drag horseshi! around all day and do a good job.

[wl7bzh]

Do you think their problems might have something to do with their tendency to put advertisements in every link you touch?. Really-a link to Youtube at Yahoo is prefaced with a mandatory ad before the video is allowed to play. Most other places don''t "charge" that ad fee.

Yahoo-who can respect the internet advertising bordello?