Yahoo makes progress with revenue as new boss sacks staff

Yahoo's first-quarter results showed signs of progress which can help boost the credibility of recently hired chief executive Scott Thompson as he tries to show round the long-sputtering internet company.

The strides announced yesterday were small compared with the large gains rivals which includes Google and Facebook were reaping as advertisers shift more in their budgets to the net.

Nevertheless, Yahoo's showing for the primary three months of the year included an elusive breakthrough. The company's revenue increased from the prior year for the 1st time because the US economy began sinking into recession within the autumn of 2008.

It broke a streak of 13 consecutive quarterly declines in Yahoo's net revenue - the amount of cash that the corporate keeps after paying commissions to its ad partners.

"We still have plenty of work to do, but it's a massive milestone for us," said Tim Morse, Yahoo's chief financial officer.

Yahoo's earnings also rose inside the first quarter, but that is not a brand new phenomenon. The company's net income had also been rising under Thompson's predecessor, tough-talking Carol Bartz, mostly as a result of cost cutting.

But Bartz never could produce a year-over-year increase in Yahoo's quarterly revenue before she was fired last September. Yahoo lured Thompson faraway from eBay Inc's online payment service, PayPal, three months ago.

In Thompson's first full quarter as chief executive, Yahoo earned US$286 million ($347 million), or 23 cents per share. That represented a 28 per cent increase from net income of US$223 million, or 17 cents per share, even as last year. The earnings for this year's quarter exceeded the common estimate of 17c per share among analysts surveyed by FactSet.

Thompson didn't spend much time crowing concerning the first-quarter revenue increase, probably since it was the sort of small gain. Net revenue totalled US$1.08 billion, a rise of US$13 million, or 1 per cent, from the identical time last year.

Thompson assured analysts he won't feel free until Yahoo's revenue is keeping pace with the remainder of the web ad market.

"Yahoo ought to be nimble, responsive and act with a genuine sense of urgency," Thompson said at the call. "We need to think and to maneuver like a growth company."

Investors evidently liked what they saw within the numbers and what they heard from Thompson. Yahoo shares rose 43c, or nearly 3 per cent, to US$15.44 yesterday.

The stock hasn't traded above US$20 because the third quarter of 2008, the last time Yahoo's revenue climbed from the former year.

Yahoo is attempting to herald extra money with fewer workers and products. Earlier this month, Thompson announced the biggest layoffs in Yahoo's 17-year history in a price-cutting move so one can save the corporate about US$375 million annually.

The housecleaning will jettison 2000 employees, or 14 per cent of Yahoo's workforce.

Thompson told analysts yesterday that the cuts had to be made because Yahoo had grown too unwieldy.

He also said he was within the means of attempting to sell about 50 Yahoo services and products that weren't attracting enough traffic to the company's website or producing enough revenue.

- AP

By Michael Liedtke