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Jan. 29, 2008

At the close of the markets today, Yahoo did report fourth quarter earnings that beat analysts' expectations, but sales guidance for this year disappointed investors and made Yahoo's shares drop.

Some observers said they were surprised to learn that the company didn't make any announcements regarding layoffs, which had been rumored a lot for the past seven days.

Still, Yahoo reported net income of $206 million, or 15 cents per share, beating analysts' forecasts for 11 cents per share.

Yahoo's sales came in at $1.8 billion, up eight percent from corresponding 2007 levels.

According to preliminary estimates from Thomson First Call, excluding advertising sales and TAC (traffic acquisition costs) that the company shares with its partners, Yahoo reported revenue of $1.4 billion, roughly in line with Wall Street's expectations of $1.41 billion.

As could be expected, Yahoo's stock dropped about seven percent in after-hours trading as sales guidance for 2008 was much lower than expected.

Yahoo chief executive officer Jerry Yang, who replaced Terry Semel as CEO in June 2007, promised investors a 100-day review of the company shortly after taking over.

Some analysts have said that investors are growing rather impatient with Yahoo as it continues to lose ground to Google and others.

Yahoo is the number two search engine in the world, and by a wide margin, it greatly lags archrival Google, which will report its fourth-quarter results Jan. 31.

Yahoo also faces strong competition from social networking sites like Facebook and MySpace.

360, Yahoo's own attempt at a social networking site was deemed a failure.

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Source: Tech Crunch