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Yahoo! Recovering Under CEO Bartz

Yahoo! Inc. (YHOO) ended its first year under CEO Carol Bartz on a high note.

The Internet company for several years has lagged behind rival Google Inc. in search engine users and display advertising. But Yahoo! could be near a comeback. On Tuesday afternoon, Yahoo! reported fourth-quarter profit of $153 million, even on lower sales. The number marked a reversal from losses of $303 million in the final three months of 2008.

Revenue fell to $1.7 billion, a 4 percent drop from the same period in 2008, but a 10 percent increase from 2009’s third quarter.

The news wasn’t all good, though, underscoring Yahoo!’s ongoing challenges. Search was down 15 percent year-over-year and display ads were down 1 percent.

The earnings results included a charge stemming from the pending search-and-advertising deal with Microsoft Corp, and for general restructuring. Yahoo! has laid off hundreds of workers in the past year.

The numbers show that turnaround efforts headed by Bartz appear to be working. Bartz was hired a year ago to replace CEO Jerry Yang, who also co-founded Yahoo!. Analysts had said for months Yang needed to step down in favor of someone with more business acumen. When Bartz came on board, she upended the executive roster, laid off some workers, renewed partnership talks with other tech firms and sold some assets, all decisions Yang seemed reluctant to make. And it looks like those choices are paying off. As Bartz told analysts on a conference call on Tuesday, “Things seem to be returning to a more normal state.”

Yahoo! also expects conditions to be improving for its first quarter. The company is projecting net revenue of between $1.13 billion and $1.2 billion. That’s about in line with analysts’ expectations – Thomson Reuters data show Wall Street’s projecting net revenue of $1.16 billion.


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