As predicted yesterday on this blog Yahoo earnings suck and their stock falls 10%. Despite advertisers spending more money online and Yahoo completely revamping Yahoo Search Marketing they still fail.
I think the stock will fall even more if Google and Amazon throw out good numbers tomorrow and Thursday with their q4 earnings.
Via Yahoo News
The Sunnyvale-based company said Tuesday it earned $205.7 million, or 15 cents per share, during 2007′s final three months, a 23 percent drop from net income of $268.7 million, or 19 cents per share, at the same time in 2006.
Reflecting the gloomy aura hanging over Yahoo, analysts had prepared investors for even worse earnings erosion. The pessimism prompted analysts, on average, to project earnings of 11 cents per share for the period.
Revenue for the period totaled $1.83 billion, a 8 percent improvement from $1.7 billion in 2006.
After subtracting commissions paid to its advertising partner, Yahoo’s revenue fell to $1.4 billion, in line with analyst estimates.
Yahoo has been mulling firing hundreds of workers as part of its long-running effort to snap out of a stock decline during the past two years, but the company’s announcement Tuesday didn’t mention job cuts.
Yahoo co-founder Jerry Yang, who returned as chief executive seven months ago, signaled the company has challenges ahead.
“While we will continue to face headwinds this year, we believe that the moves we are making will help us exit 2008 stronger and more competitive and return to higher levels of operating cash flow growth in 2009,” Yang said in a statement.
Excluding ad commissions, Yahoo estimated its revenue this year will range from $5.35 billion to $5.95 billion. The average analyst estimate stood at $5.92 billion, according to Thomson Financial.
Yahoo shares plummeted about $2 to $18.93, almost 10 percent, in extended trading Tuesday after finishing the regular session at $20.81, up 3 cents.
Last year marked the first time Yahoo’s earnings have dropped from the previous year since the company lost $93 million in 2001 during the aftermath of the dot-com bust. That was also the last time that Yahoo fired hundreds of workers.
Unlike in 2001, Yahoo hasn’t stopped making money. But the company’s 2007 profit fell 12 percent to $660 million even though advertisers spent more than ever on the Internet, where Yahoo still draws one of the Web’s largest audiences.
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Hi I am Jeremy Schoemaker and ShoeMoney.com is my blog. 99% of the post here are done by me but you will see others occasionally make guest posts. This blog is fun to write but for my day job I run several online companies.
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{ 41 comments… read them below or add one }
When does everyone predict Yahoo will close up shop?
ouch, thats gotta hurt…
@ Chris – Im not sure there are talks about them closing up shop any time soon. If Vonage can lost money since the day they started, then Im sure Yahoo has at least a good 5 – 10 years before going under
Why do people assume Yahoo! is going down? They’re a competitor to Google, but not going anywhere. I’m a Google user at heart…but Yahoo! still has unique tools that I use.
Maybe if Yahoo didnt bombard me with all sorts of clutter on their main page I would use it more. Google sticks to the very minimum and thats all I need. If I want more, I’ll come get it, dont push it on me. Simple push vs. pull offerings.
hey Erica hows everything going? Well to elaborate on the Yahoo going down. Since I am in the inside world of pay per click, I see their failure and future direction in the PPC market. Their audience is not big enough to keep larger advertisers attention. Their interface and integration is seemingly impossible and if the time put into managing a yahoo account and optimizing outweighs itself. Therefore more and more advertiser will abandon them over time until their only clients are small business which is hardly enough to keep them afloat. I have actually spoken to many Yahoo people and employees and many will agree its eventual
haha, i actually had a discussion with yahoo about that. They will not remove the clutter because the homepage and all its ads are worth 1 million per day to them.
You mean like this? http://search.yahoo.com/
No clutter.
well they revamped Yahoo search, but it still sucks. so they probably should have just left it alone.
Google just has a far superior product and probably will for some time to come.
Wow, bad news for Yahoo. I wonder if they will go up for sale?
That would be kind of bad news if Yahoo closed up shop. Maybe Google will buy them.
I try and steer away from the stock market too.
They’re pullin’ a Google.
Yahoo! Mail, free fantasy football, and geocities are my favorite Yahoo! productions.
Called it!
They have to go figure out who and what they are. If they are going to be Pepsi to Googles Coke, they have to give people a reason to switch.
They are in a death spiral now.
Well that was bound to happen with Yahoo.
Haha. Yahoo is this? I did not know…
For curiosity, your videos on YouTube already have been seen many times?
Google is also is down about $125 a share from their high in Nov and shaved off billions in market cap. Q4 was bad for most tech stocks.
Yahoo “reported fourth-quarter earnings that beat analysts by $0.04 cents per share. The struggling Internet giant reported earnings of $0.15 per share, compared to estimates of $0.11.” The share price prior to earnings already reflected the earnings dip, as it was expected. Actually, Yahoo beat what was expected.
The 10% dip in share price is because of Yahoo estimating “its revenue this year will range from $5.35 billion to $5.95 billion. The average analyst estimate stood at $5.92 billion” – estimating on the low side of the range isn’t going to help them.
As for Google, if they don’t exceed expectations, they’ve failed. If they only match what the street is expecting, watch for shareholders to sell.
Stock market is taking a real hit right now, I think it sucks but my revenue just keeps moving up, sucks to be them…not
Wow, whats the matter with Yahoo… Their downfall continues…
I don’t think only Yahoo has a problem. The whole economy has a problem and this is indirectly influencing the internet market.
I can’t see Yahoo closing up Globally anytime soon. I guess they could go in partnership with MSN/Live.
This doesn’t sound like such a bad thing for the smal PPC advertiser. Maybe we can find some cheap campaigns.
Of course it is influencing the internet market, I don’t like this kind of crisises.
Why is it assumed that Yahoo!’s going down? In my opinion, they’re static.
I have to disagree, I, along with many other people, I’m sure, would be very disappointed with the “closing” of Yahoo! That very small audience alone will keep it in existence, if nothing more.
So apparently it won’t only help to drop 2k employees. They also need to optimize their processes and drop off things that aren’t making them any profits.
It sucks how the economy is going down atm imho
I am lazy. Typing search.yahoo.com takes a lot longer than google.com, or yahoo.com. They should move their front page to clutter.yahoo.com
They are just slowly losing more and more of the market share to google, and unless they somehow reverse the trend by doing something innovative, its just going to continue.
I think expectations for Google are too low at this point. They report earnings tomorrow, should be interesting to watch. People seem to be assuming that bad Yahoo earnings means bad G earnings.
Dunno about most people, but my Adwords spending is on a steady ramp up, while Yahoo’s more static.
This is bad signs for Yahoo employees. I sincerely do feel for them.
It is hard to feel sorry for ‘the company’ though as people have been saying for years that they need to make some big improvements in YSM and the way they treat advertisers. I’m probably not a big spender but I’ve had a technical issue with my YSM account that has prevented me from displaying ads for a month. I’ve sent an e-mail every week and haven’t had a reply yet.
I don’t know about ‘closing up shop’ but the talk about a merger between MSN and Yahoo may start again.
For me, there is no doubt that Google will win the battle – IMO, they have already won it. It is going to take something special from Yahoo to get back into the SE game.
Good time to own Yahoo was yesterday… Microsoft is making a run at the web company for $31 a share!
http://money.cnn.com/2008/02/01/technology/microsoft_yahoo/index.htm?cnn=yes
the yahoo stock price was way too low, and their market share still remained strong. Alexa still ranks them the #1 site worldwide. I guess now that microsoft made a bid for 44 billion all your recession talk can stop and we all should have probably bought some Yahoo stock:) Already up 50% from yesterdays close….
Boy did you screw the pooch on this one! And to think, I nearly picked up a few hundred shares yesterday.
Google to $450.00, Just my Opinion
hummmmm now is the time to buy yahoo stock, but does there stock go up if they are bought or does it go down. Can you let me know please so I know what I should do.
” Comment by David G.
2008-02-01 10:10:27
Google to $450.00, Just my Opinion”
Lucky Guess?
Now time to see if Google Stock can bounce back to the $498/$500 level, barring any positive news it should roll over there to test the $420 level. A break of the $400 mark should send it down to the $330/$320′s. Just my Opinion of course.
David G.
now that we look back im happy yahoo stuck it out and road it out they are on the rise again even after declining microsofts offer.