Yahoo Struggles at the Stock Market

January 30, 2008

(Long Island, N.Y.) In its bid to upturn a sliding outlook for the year 2008, Yahoo Inc.’s announcement two weeks ago of cutting up to 1000 jobs by May didn’t persuade the Stock Market in reversing its fortune. Instead, a slew of negative news reached Wall Street from the company’s headquarters in San Francisco this week as income statements and profits were filed by the company.

Yahoo reported a loss of 23% for its fourth quarterly profit prompting its shares of stocks to dip further by 10 percent in extended trading. In the latter part of 2005 where Yahoo was at its peak, shareholders had $35 Billion in hand. Now three years removed from that big success, the market value of Yahoo Inc. is less than half of that amount at around $17 Billion, a big drop-off that has its shareholders crying for action from CEO and co-founder Jerry Yang.

The lay-off of 1000 employees nationwide by Yahoo will save the company an estimated $100 Million annually in operating costs alone but they will have to take in over $25 Million upfront to pay for severance fees and other benefits that employees who lost their jobs will get. Also, Yahoo announced that some employees who will lose their positions this May might be re-assigned to some other parts of the company’s operations. Further details will be released this coming February outlining the whole process and the figures to match.

In a prepared statement, CEO Jerry Yang said. “This sort of transition takes time, but we have the talent and the strong cash flow it takes to succeed.”

Experts and investors are critical of how Yang has handled the company since he was assigned as the company’s CEO seven months ago. “I’m surprised by how slowly they seem to be moving,” said Cantor Fitzgerald analyst Derek Brown. “Yahoo still has quite a bit of work ahead.”

Posted by News LI Editor · Edited by Brianna - Filed Under Business