Yahoo has come out with its figures for the first quarter of 2009, and although the drop-off in advertising has taken its toll, the numbers aren’t as bad as many imagined.
Revenue dropped 13% to $1.58 billion, but if allowances are made for fluctuations in exchange rates, that drops to 8%. The company also blamed other factors, namely the sale of Kelkoo, along with lower fees from other sources, including VoIP and music subscriptions, for the drop. But cash flow of $409 million exceeded the midpoint of the outlook range provided by the company last quarter.
But Yahoo has also been slashing costs, which has helped the company with a better than expected net income of $118 million. That’s far worse than the same quarter of 2008, when it stood at $537 million, but that figure was inflated by $401 million from the sale of Alibaba.com. Meanwhile, the company will trim costs further by shedding another 5% of its staff.
“Yahoo! is not immune to the ongoing economic downturn, but careful cost management in the first quarter allowed our operating cash flow to come in near the high end of our outlook range,” said Yahoo! chief executive officer Carol Bartz. “While we experienced pressure in both display and search advertising in the first quarter, we believe Yahoo! remains one of the most compelling advertising buys on the Internet. With our leading audience properties, substantial reach and innovative advertising solutions, we are confident Yahoo! will be well positioned when online brand advertising resumes its growth.”
The company wouldn’t discuss whether it was once again in talks with Microsoft, but Bartz noted:
"I’m well versed enough in the search business at Yahoo to say it’s absolutely critical to Yahoo."
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