Yahoo Profits Fall 23%, Cuts 1,000 Jobs

Yahoo on Tuesday said it would cut 1,000 jobs in February, as the Web portal reported that profits fell by 23% in its fiscal fourth quarter.

The company said net income for the quarter ended Dec. 31 fell to $206 million, or 15 cents a share, from $269 million, or 19 cents a share, for the same period a year ago. Contributing to the drop were stock-based compensation and other expenses. Operating income for the quarter plunged 38% to $191 million from $308 million a year ago.

Revenues rose 8% to $1.8 billion from $1.7 billion a year ago. Marketing services, which include online advertising sales, rose by 7% to $1.6 billion from $1.5 billion. Revenues from Yahoo's owned-and-operated sites rose by 23%, while sales on affiliate Web sites increased by 13%.

During a conference call with financial analysts, Yahoo chief executive Jerry Yang announced there would be a "realignment" of 1,000 jobs at the company, which had 14,300 employees as of the end of last year. As a result, the company expected to incur a $20 million to $25 million charge. Some employees would be shifted to other jobs, and the company planned to add people in areas deemed as priorities.

Yang told analysts the company was spending money to change its advertising platform and operations, and expected to exit 2008 stronger and more competitive, and return to higher levels of operating cash flow growth next year. "We're not tinkering around the edges," Yang said. "We're making significant and game-changing investments in Yahoo's future." read full story