Forecast For Yahoo: Mild And Stormy

Monday, January 28, 2008 by Mistlee




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01.28.08

Forecast For Yahoo: Mild And Stormy

By David A. Utter

Layoff rumors swirl ahead of full year report...

As one of the biggest brands on the Internet,
Yahoo's competitors envy the traffic Yahoo
receives.

On Wall Street, analysts only see gridlock.

No argument withstands the truth about Wall Street: investors don't always think the same as the observing public. Say "layoff" to a typical person, and one likely gets a negative response.

Tell an investor the company they hold plans to streamline headcount, and you'll need a towel to clean up the happy fluids.

Yahoo CEO Jerry Yang has the privilege of entertaining those investors, not to mention the scurrilous media, when announcing the company's full year financials tomorrow. Potential layoffs rumored from a few hundred to a couple of thousand may become fact.

It may not be enough to satisfy investors impatient with the lackluster performance of Yahoo's stock, in spite of its online presence and revenue.

A USA Today report suggested serious grumbling about Yang's pace will be heard after the markets close on Tuesday:

"The thought was that Jerry would move quickly and boldly," says Sanford C. Bernstein analyst Jeffrey Lindsay, who says Yahoo must take "radical steps" - such as massive layoffs, acquisitions of promising developers and an outsourcing deal for online searches with Google - to reassert itself. "We've heard nothing."

Try a Better Way Today. Try WebEx PCNow

Giving Google Yahoo's search business may be the key to Yahoo making money from search advertising. But Danny Sullivan, in his AdAge column, thinks Yahoo would be crazy to give that up:

Sure, sure -- but what about the fact that for years Yahoo failed to mature the system it inherited? Last year's "Panama" upgrade was largely to match features at Google, which had surpassed Yahoo. Isn't that a sign that Yahoo was doing too little too late? Nope. That's a sign that Yahoo, despite its archaic system, had -- and still has -- the one feature Microsoft desperately wishes it could match: traffic.

Where Sullivan sees traffic, Wall Street sees gridlock. Perceptions may change tomorrow, but it seems the higher layoff figures in the two thousand and up range will be well above what Yang delivers.


About the Author:
David Utter is a staff writer for WebProNews covering technology and business.

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