Yahoo CEO to outline his strategy with 1Q results

Apr 13, 2012 By MICHAEL LIEDTKE , AP Technology Writer

(AP) -- Yahoo CEO Scott Thompson is expected to elaborate on his turnaround plans when the beleaguered Internet company releases its first-quarter results.

WHAT TO WATCH FOR: The report, scheduled to be released after the stock market closes Tuesday, is expected to show Yahoo Inc. remains in a malaise that has been hobbling its stock for years.

Unless there is a big surprise in the first-quarter numbers, investors are more likely to be focused on what Thompson says during a conference call that will be held shortly after the report comes out.

Thompson has promised to use the call as a forum for explaining his vision after laying off 2,000 employees, or about 14 percent of Yahoo's workforce, earlier this month. Most investors seemed to believe the cuts were long overdue, but now they want to know how Thompson intends to revive Yahoo's revenue growth with fewer resources.

Figuring out how to snap Yahoo out of its financial funk is a problem that three other CEOs haven't been able to figure out during the past five years. Yahoo lured Thompson away from .'s PayPal payment service three months ago in hopes that he would come up with a better plan.

Thompson has offered few concrete details so far. He has made it clear that Yahoo needs to do a better job of analyzing the data that the company collects about its website's 700 million monthly visitors so it can sell more advertising. He also believes Yahoo needs to focus on improving its as people increasingly surf the Web on smartphones and instead of desktop and .

In an effort to spur more rapid innovation, Thompson is streamlining Yahoo's management to minimize bureaucracy. He also is trying to sharpen the company's focus on his top priorities, a process that may lead to the sale of some Yahoo services. Thompson already has begun disposing of a Yahoo division that helps place ads around the Web.

Yahoo is in this situation largely because it hasn't been keeping pace with Internet search leader Google Inc. and social networking leader Facebook Inc. as more advertising shifted online. Google's annual revenue has increased from $22 billion in 2008 to nearly $38 billion last year while Facebook's annual revenue has soared from $272 million to $3.7 billion during the same period. Meanwhile, Yahoo's annual revenue has crumbled from $7.2 billion in 2007 to $5 billion last year.

Thompson may not have a lot of time to fix things. Tensions are already rising with one of Yahoo's major shareholders, activist investor Daniel Loeb, who has become increasingly antagonistic toward Thompson while waging a campaign to gain four seats on the company's board of directors.

If Yahoo's struggles continue, other shareholders may be more inclined to elect Loeb and three of his allies to the board later this summer instead of the candidates that Thompson is backing. A successful mutiny could put Thompson's job security in jeopardy, if Loeb isn't satisfied with the company's progress.

WHY IT MATTERS: If Yahoo can't bounce back, more people are likely to lose their jobs and more services could be closed. In a more extreme scenario, the company could be sold in its entirety.

WHAT'S EXPECTED: Analysts polled by FactSet project earnings of 17 cents per share on revenue of $1.06 billion, after subtracting Yahoo's ad commissions.

LAST YEAR'S QUARTER: Yahoo earned $223 million, or 17 cents per share, on net revenue of $1.06 billion a year ago. The results included a charge of $26 million, or 2 cents per share, to account for the diminished value of the company's holdings in Japan.

Explore further: Cook calls 'religious objection' laws dangerous


Related Stories

New Yahoo CEO can't afford to dawdle on to-do list

Jan 05, 2012

(AP) -- When he takes over as Yahoo's CEO next week, Scott Thompson will be under more intense scrutiny than he faced the past three years while crafting PayPal's online payments service into one of the crown jewels in eBay ...

Yahoo board battle may begin within the next week

Mar 15, 2012

(AP) -- A potentially nasty battle to reshape Yahoo's board of directors will begin within the next week unless the troubled Internet company submits to the demands of a major shareholder.

Recommended for you

Amazon unveils move in local services

1 hour ago

US online giant Amazon said Monday it was launching a services marketplace offering to connect consumers with businesses offering anything from home improvement to piano lessons.

Intel in talks with Altera on tie-up

Mar 27, 2015

US tech giant Intel is in talks with rival Altera on a tie-up to broaden the chipmaker's product line amid growth in Internet-connected devices, the Wall Street Journal reported Friday.

Apple chief Cook to give his wealth away: Fortune

Mar 27, 2015

Apple chief Tim Cook is joining Mark Zuckerberg, Bill Gates and other technology titans who have vowed to donate their wealth to charities, according to a report in Fortune magazine.

User comments : 0

Please sign in to add a comment. Registration is free, and takes less than a minute. Read more

Click here to reset your password.
Sign in to get notified via email when new comments are made.