Yahoo!'s profits slump

July 28, 2011

Yahoo!'s profits have slumped - with the firm's top brass shifting blame to Microsoft's underperforming Ad Centre and Yahoo!'s recent sales management shuffle.

According to CNet.com, Yahoo!'s second quarter revenues suffered as sales staff bolted following a management shuffle, leaving the firm with fewer hands to sell premium display ads to big-name customers and just enough hands to sell lower-priced ads to its most trafficked sites.

"We underestimated how much the changes would increase turnover. We didn't have enough salespeople in front of big clients," Yahoo!'s CEO Carol Bartz said, explaining poor sales saw the firm rake in a disappointing $1.08 billion in second quarter revenues - $102 million less than forecast by Wall Street.

Tim Morse, Yahoo!'s chief financial officer, added that poor staffing caused Yahoo!'s display advertisingrevenues to come in at just $467 million - $40 million below expectations.

Morse said Yahoo!'s poor sales make for bitter viewing given the firm had runaway successes during the second quarter and premium ad inventory left to sell. 

According to Morse, Yahoo! set one-day traffic records by taking over 400 million page views over the Royal Wedding - making Yahoo! the web's top royal wedding site. 

What's more, the death of Osama Bin Laden generated 900 million page views on Yahoo! News, 50 million video streams and 500 million photo views in just one week. 

Both Bartz and Morse also conceded that the sales staff who didn't jump ship faced "technology limitations" when using Microsoft's Ad Centre. 

The pair said converting to their Bing-hoo! buddy's system of buying and delivering ads had caused Yahoo! search revenues to fall 15 per cent to $371 million. 

Yahoo!'s tepid performance is all the more disappointing after the firm's cool first-quarter earnings beat Wall Street estimates. 

Source:  bigmouthmedia.com