Yahoo
“We have fallen and we really want to get back up,” Yahoo Chief Executive Carol Bartz said as she kicked off an all-day meeting with financial analysts. “We really want to get back on our tippy toes.”
Bartz vowed to make the company more profitable, and said she hoped Wednesdays session would win back some of the respect that the company lost as two previous CEOs were unable to deliver on their turnaround promises.
As a first step, Yahoo pledged to boost its operating profit margin to a range of 15 percent to 20 percent by 2012, up from just 6 percent this year – a performance Bartz derided as “pathetic.”
Although it didnt set a specific timetable for hitting a target, Yahoo said it believes it can increase its annual revenue by nearly $1.5 billion. The company, based in Sunnyvale, thinks it rake in the extra money doing a better job of capitalizing on a marketing shift to the Internet in the U.S. and expanding its market share internationally.
Yahoo expects it revenue this year to be about $6.4 billion, a decline of roughly 11 percent from 2008. Management also plans to increase profits by weeding out expenses, simplifying its computer coding and eliminating wasteful spending. Yahoo already has trimmed its work force by 13 percent, or 2,000 jobs, during the past year.
Wednesdays meeting marked the first time that Yahoo provided analysts with an extended overview of its strategy in 3 1/2 years. Most public companies hold the presentations, known as “analyst days,” every year or two. The Associated Press monitored Yahoos meeting through a webcast.
Yahoo has been losing ground to Google Inc. and other hot Web sites, such as Facebook. The problems have hurt Yahoos earnings and revenue, contributing to a 47 percent drop in its stock price that has wiped out about $19 billion in shareholder wealth since the last analyst day.
Yahoo shares fell 65 cents, or 3.9 percent, to close Wednesday at $16.04.
Most of Wednesdays meeting was devoted to a procession of management executives elaborating on improvements to the companys Web site.
Among other things, the executives detailed how a makeover of Yahoos home page is getting people to spend more time on the Web site and providing more opportunities to show the advertising that generates most of the companys revenue.
As visitors spend more time on the Web site, Yahoo is collecting more information about its users interest that management expects to help deliver more ads that get their attention.
“We have more insight than the average bear,” Bartz said. “The opportunity to mine that data … is enormous for us.”
Under the proposed alliance, Microsoft will process users Internet search requests on Yahoos Web site and provide much of the advertising tied to those inquiries. The deal, which still requires regulatory approval, is supposed to lower Yahoos expenses, freeing the company to focus on luring more traffic to its Web site.
A definitive agreement between Yahoo and Microsoft was supposed to be signed by now, but the companies agreed Wednesday to an indefinite extension to negotiate a few more details. Bartz assured analysts that there were no major snags threatening the partnership.
Bartz forged the Microsoft partnership in July, ending years of intermittent discussions between the companies that became a sore point with investors last year. Thats when Bartzs predecessor, Yahoo co-founder Jerry Yang, turned down a chance to sell the company in its entirety to Microsoft for $47.5 billion, or $33 per share.
Yangs hopes to forge an Internet search partnership with Google then fell apart under regulatory scrutiny, leading to Bartzs hiring nine months ago.