Yahoo has momentum says Bartz  (Source: Venture Beat)
Execs still maintain they have momentum

Yahoo is still having a very hard time in the search market. The once dominant portal still has a generous amount of traffic and its and advertising programs do well, but earnings are falling and competition for the likes of Google and Facebook is making prospects for the company look even worse.

Yahoo warned this week that its Q1 revenue will slip again as the year starts with a whimper for the ailing website. One of the big ways that Yahoo sought to improve its financial position was the much talked about deal with Microsoft for search results and profit sharing. The benefits of that search agreement with Microsoft have so far not shown up.

Analyst Brian Pitz from UBS said, "This is still a company [Yahoo] in transition that hasn't really got where it needs to be yet."

CEO Carol Bartz is exploring every option to improve the position of Yahoo and so far many of the things she has done have been to cut costs and many of the cost cutting measures have involved layoffs and shedding underperforming properties.

Yahoo was looking to shed as many as 700 workers in December and more layoffs are coming. Yahoo announced the second round of layoffs (which amounts to roughly 1% of its global workforce) the same day it reported on its bleak Q1 2011 performance.

Bartz said, "I will not back down on the fact that we are getting momentum. There is a lot going on here." The response came after an analyst at the conference challenged her on declining revenue despite execs claiming that progress was being made.

The execs from Yahoo did acknowledge that the money expected to come in from the Microsoft partnership had so far not materialized. However, they maintain that the benefits of the partnership should come later this year. Some analysts don’t believe that.

Ben Schachter, an analyst from Macquarie Research said, "One of the biggest benefits of the combination of Microsoft and Yahoo was supposed to be on the RPS (revenue per search) side. We expected it to happen already. We still don't understand why it hasn't happened. So I'm not going to be giving them the benefit of the doubt that it will be magically fixed by the middle of this year."

Yahoo has projected its net revenue at between $1.02 billion and $1.08 billion for Q1 2011 and analysts were expecting $1.13 billion.

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