Posted October 22, 2008 8:40 am by with 10 comments

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Yahoo reported its Q3 earnings today, and it’s not all good news. Well, on the positive side, Yahoo’s revenues are up to $1.8 million. The bad news is that it’s only 1% YOY. And the worse news is that their profits were $54.3 million in Q3—compared to $151.3 million for Q3 2007.

And possibly worst of all, Yahoo is trying to cut its annualized costs for this year from $3.9 billion down to $3.5 billion. Normally, cutting costs is a good idea, and this is a good idea—but it really sucks for the 10% of Yahoo’s workforce that will be getting pink slips over the coming weeks. At least 1430 employees will be laid off as the company tries to trim the bottom line.

Yahoo blames display ads’ drop off in recent months for their down turn, as ClickZ reports:

Guaranteed display ad volume and pricing was down in the U.S. as non-guaranteed ad volume and pricing rose, said [Yahoo President Sue] Decker, noting, “The majority of our business is premium.” Overall, spending was slower for most ad verticals, although finance, travel, retail, and auto were the hardest hit in Q3.

As paidContent points out, announcing layoffs “over the next several weeks” can have a serious impact on morale, especially in conjunction with today’s Q3 report and the difficulties in Washington for the Yahoo/Google ad deal.

It’s not easy to have a positive outlook when so much is going wrong for you. Then again, perhaps there’s nowhere to go but up for Yahoo. What do you think?

  • Yahoo has always confused me. People like to compare the choice between Yahoo and Google like Pepsi and Coke but isn’t it more like WalCola and Coke? I guess really at $3.5b it’s no laughing stock but honest, who uses Yahoo?

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  • There is another way. Go back to negotiate with MS.

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  • I agree with Nicole that the best thing for them might be to join forces with MS. It probably isn’t the best match in the world, but they can probably do more together than they’re currently doing apart.

    Andrey’s last blog post..Yahoo! Dissappoints! Investors!

  • I think we will be seeing much more of this in the upcoming future. With things slowing down for many large companies staying profitable and trimming off any excess fat will be vital.

  • I just wait and see, what will happen next

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  • Well, not true. They havent hit rock-bottom yet.

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  • In any case it is worth remembering that they are not losing money: they are just not making as much money as they had anticipated. It is always important to make that distinction, I believe.

    I certainly wish Yahoo a speedy recovery. Their contribution continues to be fundamental to our business.

  • Yahoo has more places to drop yet, but so far they are holding strong. I don’t think that it will be long though.

  • Did They forget MSN? There’s another way…, always!

  • It really sucks that a lot of employers will be loosing their jobs. I hope Yahoo will be able to get themselves out of this mess.

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