Yahoo Warns on Earnings; CEO to Step Down

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"The magnitude of the decline is stunning."

-- Rachel Gibson (rgibson@hotmail.com), March 08, 2001

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[Comment: Another one bites the dust. Note the paragraph about declining advertising. The claim is made that advertisers are switching from the 'net to more traditional venues, but based on my own direct observations, I think there is an overall decline in amount of advertising as the economy skids. This is slowly becoming more obvious everywhere I look, including newspapers and TV. --Andre]

Headline: Yahoo!'s Tim Koogle stepping down as CEO, will stay on as chairman Source: Associated Press, 7 Mar 2001 SAN JOSE, Calif. (March 7, 2001 7:32 p.m. EST http://www.nandotimes.com) - Tim Koogle is stepping aside as chief executive of struggling Internet bellwether Yahoo! Inc., though he will continue to serve as chairman.

The company also announced Wednesday that its first-quarter earnings will fall well short of Wall Street's expectations.

Koogle, who will remain in his post until a replacement is found and stay on as chairman after that, said he and the company's board had decided on "building out our senior management bench strength across the company in order to prepare for our next stage of growth."

The news followed a day of intense speculation after trading in shares of Yahoo were halted shortly after the markets opened Wednesday, following the company's cancellation of an appearance at a New York conference about the Internet.

Shares dropped 6 percent in initial trading, falling $1.38 to $21 before trading was halted on the Nasdaq Stock Market.

No reason was given for the company's decision to forgo an appearance at the Merrill Lynch Internet Conference in New York, though Yahoo later said it would make an announcement Wednesday afternoon.

Adding to the recent spell of bad news in the high-tech world, Yahoo said it expects to "approximately break even" in the first quarter, which ends March 31, excluding one-time charges. Analysts surveyed by First Call/Thomson Financial had been expecting earnings of 5 cents per share, down from 10 cents per share a year ago.

Yahoo, which will formally announce earnings on April 11, also said it expects first quarter revenues to be in the range of $170 million to $180 million; a year ago, Yahoo posted revenue of $228.4 million.

Yahoo said it was being hurt as the weakening economy forced advertisers to cut back on their marketing. The company also is encountering difficulties as its advertising base shifts from Internet businesses to more traditional companies.

"Even though Yahoo! is currently being affected by both the weak economy and a client base that is transitioning to traditional marketers, we remain confident that our business model will continue to demonstrate its effectiveness," said Susan Decker, chief financial officer.

"We are evaluating our operating plans and investment priorities to determine which operational changes to pursue that will lead to long- term shareholder value."

-- Andre Weltman (aweltman@state.pa.us), March 08, 2001.


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