While Yahoo is still an internet giant and sees tremendous traffic, it has
fallen on hard times. An advertising deal with Google and a major
reorganization of its upper level management were not enough to entirely
turn things around, as indicated by the metrics on the latest earning report.
In Q2 2008 Yahoo saw its net income fall from $161M USD in Q2 2007 to $131M USD
this year, a drop of 19 percent. The gross revenue fared better rising 6
percent to $1.798B USD. However, even this one strong spot was the sign of some
investor griping. The revenue from sites carrying Google ads amounted to $1.35B
USD, an 8 percent rise. Investors were disappointed as they expected at least
Despite the bad news on the profits front, Yahoo Chief Financial Officer Blake
Jorgensen refused to change its outlook for the coming quarters. This move was
characteristic of the company which some label as stubborn and others label as
determined. Mr. Jorgensen alluded to the revenue rise, stating, "We are
pretty pleased (with results), relative to both the distractions and the
Jeffrey Lindsay, analyst at Sanford C. Bernstein is not optimistic on Yahoo,
but says that at least it doesn't have to worry about exceptionally high
expectations. He states, "Investors braced for the worst ...These results
are poor, but relative to what people were expecting, they're not so bad."
Yahoo did indicate that it has not ruled out looking at a sale to Microsoft as
a means of alleviating its struggles. Yahoo Chief Executive Officer Jerry Yang
stated in a conference call, "We have looked at just about every
alternative you could imagine as far as looking at how do we best position the
company to go forward either through transactions and/or financial
quote: ...the boards "options" at this point amount to precisely #@$%-all.
quote: Understand this important factor: If Yahoo were sinking so much, the last thing MS would want is to jump onboard a sinking ship. MS can't do search as well, Yahoo continues to beat them, so MS must be interested in Yahoo expertise, Yahoo ability, and the value of the name they built which would have to mean there is something left worth paying a lot for. You don't pay to climb onto a sinking ship.
quote: Did it not occur to you that Yahoo is in fact still the 2nd largest next to google? Is this a small feat?
quote: If it were just as simple as branding, MS could just spin off a company with a new brand.
quote: It seems rather strange of you to think a merger with a company not doing as well in the same market would somehow slow/stop/reverse an erosion.
quote: To claim Yahoo is in a good position because of marketshare is as relevant as it gets. If they weren't in a good position then MS wouldn't have been so eager to pay, whether the amount was agreeable to both parties is the only real factor here.
quote: Yahoo reports a week quarter, but refuses to believe that its yearly financial plan is off course
quote: Everyone is feeling the effects of the stupid oil companies.