Yahoo Posts Sharply Lower Profits
RENEE MONTAGNE, host:
Another big layoff announcement came yesterday from the Internet company Yahoo. The Silicon Valley icon said it's slashing at least 10 percent of its global workforce. The company blamed the tough economy and a slowdown in advertising. NPR's Yuki Noguchi has more.
YUKI NOGUCHI: Yahoo has long been outshone by its rival Google. Last week, Google said ad sales were surging. But Yahoo's outlook was dimmer. It said profits dropped 64 percent, and sales remained flat compared to last year. Yahoo CEO, Jerry Yang, said the world's ailments have prompted cuts in marketing, especially in finance and retail.
Mr. JERRY YANG (CEO, Yahoo): As we saw the online ad market decline in the third quarter, I decided that Yahoo needed to accelerate the process of becoming more efficient and competitive. I believe getting Yahoo more fit at this time will provide the flexibility necessary for navigating current conditions.
NOGUCHI: Yang said Yahoo will continue to invest in new technologies, but would cut other costs by consolidating real estate and relocating some operations. Tim Bajarin is a Silicon Valley tech analyst. He says Yahoo still has a good online brand, but that now much of its fate rests on whether the Justice Department approves an ad partnership deal with Google.
Mr. TIM BAJARIN (Principal Analyst, Creative Strategies): The deal with Google would enhance their position in advertising and give them a stronger hand.
NOGUCHI: That deal announced in June still faces stiff scrutiny from regulators. Yuki Noguchi, NPR News.