Trading in shares of Yahoo! was yesterday suspended shortly before
the US internet bellwether announced that its first quarter
earnings will fall significantly below expectations and that it is
seeking a replacement for CEO Tim Koogle who is stepping down,
although he will continue as Chairman.
The company was expected to make first quarter revenues of
around $232 million; in a statement yesterday, the company said it
expects a figure between $170 million and $180 million. When
trading on Nasdaq was suspended, shares in the company were for the
first time valued below $21. Twelve months previously, its shares
traded at a peak of $205.
In a statement, Yahoo! said that its revised guidance for the
quarter primarily is the result of,
“the weakening macroeconomic climate, and
the resulting shortfall in marketing spending by customers due to
the economic uncertainty. In addition, the transition in the
company's customer base from pure-play internet businesses to more
traditional companies, which have a longer media planning cycle, is
occurring more rapidly than anticipated.”
Yahoo! relies on advertising for around 90% of its revenue.
Koogle added:
"All businesses in the United States are
facing challenging economic conditions that have weakened further
in recent weeks, and as consumer confidence and spending has
deteriorated, a broad range of customers have delayed their
spending across all media formats until their economic outlook
improves."
In recent weeks, Fabiola Arredondo, MD of Yahoo! Europe, and
Savio Chow, head of Asian operations, also resigned.
