Yahoo! Posts 6th Straight Loss

Thursday, April 11th 2002, 12:00 am
By: News On 6

SAN JOSE, Calif. (AP) _ Yahoo! Inc. shares dropped more than 11 percent Thursday after the Internet company posted its sixth quarterly net loss in a row, although executives said their turnaround plan remains on track.

Yahoo said Wednesday afternoon that in the first three months of the year, it lost $53.6 million, or 9 cents per share, on $192.7 million in revenue. In the first quarter of 2001, Yahoo lost $11.5 million, or 2 cents per share, on sales of $180.2 million.

But excluding a one-time, non-cash charge arising from a change in accounting methods, the Internet portal said it would have shown a profit of $10.5 million, or 2 cents per share.

Analysts surveyed by Thomson Financial/First Call were expecting 2 cents per share. Yahoo blew past the consensus revenue forecast of $175 million because of a better-than expected contribution from, a career-placement Web site Yahoo acquired for $439 million.

Yahoo shares fell $2.03 a share to $16.41 in morning trading Thursday on the Nasdaq Stock Market.

After seeing its fortunes plunge in the dot-com bust, Sunnyvale-based Yahoo pledged to reduce its reliance on advertising, which once made up 90 percent of its revenue but now comprises 63 percent.

In recent months, the company has made dozens of refinements to its site to attract new users and new sources of income. Those range from small steps, such as charging people for automatic forwarding of Yahoo e-mails, to bigger moves like the HotJobs deal.

Some of the effects showed up in the first-quarter results. While Yahoo's ad-related revenue fell 15 percent, to $121 million, direct fees paid by consumers and business users climbed 65 percent, to $55 million.

``Our business model has dramatically changed,'' said Yahoo's chief financial officer, Susan Decker.

Yahoo said its user base grew to 237 million people, including 98 million who actively logged on to the site in March. The company said that shows its ``efforts to build deeper relationships with its consumers are paying off.''

Some analysts aren't so sure. They say Yahoo has yet to prove it can increase its revenue per user with creative new services people will clamor for.

``I still think they are in the very, very early stages of that turnaround, and there remain a number of large unanswered questions,'' said Derek Brown or W.R. Hambrecht & Co.

With HotJobs fully on board in the current second quarter, Decker expects revenue to be between $205 million and $225 million. She said sales for the full year should be between $870 million and $910 million, with $20 million to $30 million coming from a new partnership to provide high-speed Internet access with SBC Communications Inc.

Both estimates were ahead of analysts' projections.

``That says to me they can grow their business just by fixing what's broken, and if the advertising market does pick up, they get an additional tailwind,'' said John Faig, an analyst for American Express.

Semel said in an interview that he expects to soon name a replacement for president and chief operating officer Jeff Mallett, a longtime Yahoo executive who said in January he would step down this month to pursue outside business opportunities.

Decker also said Yahoo would cease releasing ``pro forma'' earnings, which exclude a long list of one-time business events. Although many analysts measure companies on pro forma results, market watchers have criticized what they see as an overuse of the accounting method, especially by high-tech and Internet companies.