Plans to cut its workforce by 5%
Yahoo has reported a 78% decline in net income at $118m for the first quarter 2009, compared to $537m in the year-ago quarter, on revenue down 13% at $1.6 billion.
It said it plans to cut its workforce by 5% after profit was hit by currency rate fluctuations, the sale of Kelkoo, and lower revenue from broadband partnerships, voice-over IP services, and subscription music offerings.
During the quarter, operating income declined 17% to $101m, while diluted EPS fell 80% to $0.08, compared to $0.37 in the first quarter of 2008.
Marketing services revenue declined 12% to $1.38 billion, with owned and operated sites revenue decreasing 10% to $872m and affiliate sites revenue decreasing 16% to $511m. Fees revenue fell 20% to $197m. Geographically, US revenue declined 9% to $1.2 billion, while international revenue fell 23% to $392m.
During the quarter, the company appointed former executive chairman of Autodesk Carol Bartz as chief executive, announced the departure of its CFO Blake Jorgensen and head of mobile unit Marco Boerries as part of a management restructuring to stem declining profits.
Carol Bartz said: Yahoo is not immune to the ongoing economic downturn, but careful cost management in the first quarter allowed our operating cash flow to come in near the high end of our outlook range. We experienced pressure in both display and search advertising in the first quarter. With our audience properties, reach and advertising solutions, we are confident Yahoo! will be well positioned when online brand advertising resumes its growth.
In the second quarter it expects revenue in the range of $1.43 billion to $1.63 billion.