January 26, 2010
Yahoo! predicted a cautious return to growth in 2010, as the recovering online advertising market helped the company begin to recover from its slump.
Yahoo! reported profits of $153 million in the fourth quarter, or 11 cents a share, matching expectations. In the year prior the company posted a loss of $303 million, or 22 cents per share.
Display advertising revenue grew 26 per cent in the fourth quarter compared to the third quarter, and was up 16 per cent from the same period in 2008.
Overall revenue in the three months ending December 31 totalled $1.73 billion, compared with $1.81 billion in the fourth quarter of 2008. Excluding traffic acquisition costs, revenue was $1.26 billion, just above expectations. Yahoo!'s revenue has declined in five consecutive quarters, its deepest contraction in eight years.
But revenue in the first quarter of 2010 would range from $1.575 billion to $1.675 billion, Yahoo! said. "Our business has positive momentum and we feel good as we head into 2010," chief executive Carol Bartz said.
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Yahoo!'s results represent the company's best performance since the company hired Silicon Valley veteran Ms Bartz a year ago. Together with a new management team, she has implemented mass layoffs and sold off underperforming parts of the business.
Ms Bartz has tried to re-establish Yahoo!, still one of the most popular destinations on the web, as the centre of people's online lives. The makeover has included a redesigned front page that makes it easier to connect to Facebook and other internet services.
Yahoo! plans to reduce its expenses further by hiring Microsoft to power its search engine and the advertising tied to the search requests. The deal is expected to win regulatory approval shortly.
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Yahoo! swings to profit as display ads rebound - Times Online