Shares in Yahoo! fell by more than 15% yesterday following the
announcement by the troubled internet portal that its CEO would
resign and that its first quarter earnings will be significantly
below expectations. Other internet media stocks were affected.
Yahoo! shares dipped below $18 for the first time since the
company floated. One year ago, its share price peaked at $205. The
company this week anticipated that it will break this year, having
been profitable last year.
Shares in Terra Lycos and CNET Networks, both of which rely,
like Yahoo!, mainly on internet advertising revenues, also
suffered. CNET Networks also cut its first quarter revenue
expectations.
Similar outlook from high-tech leaders
Intel yesterday announced that it is shedding 5,000 of its
85,000 jobs over the next nine months, blaming a fall in the demand
for PCs. It also predicted a 25% drop in revenue in its first
quarter. The company said it is not forcing redundancies, instead
making the cuts by not replacing staff who leave or retire.
Networking giant Cisco Systems is planning to cut 5% of its
staff due to a slump in its sales. The news follows the company's
announcement that it will freeze hirings for the time being.
