Disappointing analysts like investment bank Piper Jaffray , the earnings outcome for the second quarter ended June 30th 2007 failed to meet predictions and Yahoo!’s share prices fell by 4.5pc late yesterday.
The search engine giant reported earnings of US$160.6m for the second quarter of 2007, a 2.3pc drop compared with a net income of US$164.3m for the same time last year.
Meanwhile revenue growth increased slightly, at 8pc, but this failed to keep pace with the overall advertising market growth. Google currently lead the way.
The recent reshuffling in management was expected to streamline Yahoo’s advertising expenditure and completely re-focus the company’s business model in the face of advertising competition.
Despite a disappointing Q2 outcome, Jerry Yang, Yahoo! co-founder and CEO said the company was “on a clear path to fulfill its potential as an internet leader”.
Recently, long-time CEO Terry Semel was replaced with co-founder Yang, and trimming the advertising fat, the display and search advertising sectors were merged into one department.
Susan Decker, president of Yahoo! Inc said that the refocus will pay off in the long term for now but will take time and investment, with the company “operating with a
great sense of urgency”.
“We are committed to making continued improvements across all of our financial metrics,” said Blake Jorgensen, chief financial officer of Yahoo! Inc.
“Though there is hard work ahead, I believe the potential for this great company is enormous, and I look forward to partnering with Jerry and Sue to help take Yahoo! into its next phase of growth.”
By Marie Boran