Yahoo! profits treble on aggressive cost-cutting
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Internet firm Yahoo! has announced a tripling of its profits, thanks largely to aggressive cost-cutting, while actual revenue fell. The company has laid off some 2,000 staff over the past year.
Internet company Yahoo! has more than tripled its profits after aggressive cost-cutting and layoffs - despite a 12% drop in revenue.
The California-based firm said net profit soared more than 244% in the third quarter to 186 million dollars, from 54 million a year ago, far surpassing Wall Street expectations.
The huge boost in profits was due in large part to cost-cutting measures implemented by Yahoo! CEO Carol Bartz since replacing co-founder Jerry Yang in January.
Yahoo! has reduced its workforce by around 2,000 during the past year. It currently has some 13,200 employees.
"Businesses have stabilised"
Yahoo! “had a solid third quarter that signals our major businesses have stabilised," Bartz said in a statement.
Yahoo! CFO Tim Morse said the company saw "strength in key areas of our business" in the quarter.
Search advertising revenue, however, fell 19% in the quarter while display advertising revenue was down 8%.
"Our efforts to reposition Yahoo! are still in the early stages, but we're confident that our investments in the business will enable us to capitalize on growth opportunities as the economy recovers," Morse said.
Partnership with Microsoft
In July, Bartz entered into a 10-year Web search and advertising partnership with Microsoft that set the stage for a joint offensive against search market leader Google.
Under the agreement, Yahoo! will use Microsoft's search engine on its own sites while Yahoo! will provide the exclusive global sales force for premium advertisers.
The agreement between the Internet portal and software giant, which is subject to review by US anti-trust regulators, is expected to close in early 2010.