Yahoo admits it's experiencing tough times
It's Internet doom and gloom time again as Yahoo tells Wall Street that this quarter's financials won't look pretty.
More doom and gloom descended on the Internet sector when Yahoo! said yesterday that it expects to report poor financial results at the end of the current quarter. The company’s chief executive offer, Tim Koogle, will also step down as CEO but remain as chairman once a replacement has been found.
Yahoo said that the quarter’s numbers, which will be revealed on April 11, have been heavily impacted by the current US economic slowdown.
The company expects revenues to be in the range of $170 million to $180 million. It expects net profits to be approximately break-even.
“All businesses in the United States are facing challenging economic conditions that have weakened further in recent weeks, and as consumer confidence and spending has deteriorated, a broad range of customers have delayed their spending across all media formats until their economic outlook improves,” said Koogle. “As a result, we expect revenues and profits to be reduced most significantly in the marketing services area of our business in the first quarter.”
Yahoo is largely reliant on online advertising for its revenue, and the company says that as in any economic slowdown, customers are cutting back marketing budgets. As a result, it argues that the current setback is short term.
"We remain confident that Yahoo!'s strong set of core assets will enable us to manage and execute through this short-term environment and emerge from it even stronger in the long-term," Koogle said. "Our user base, page views and time spent per user continue to grow, and our business and enterprise services business is solid."