Yahoo On Rough Track: CTO Steps Down And Q3 Revenue Dips – Future Uncertain !


Yahoo is going through a rough patch of track; its constant dealing unwelcome situation after it denied Microsoft $44.6 billion buyout offer back in 2008. Post to that then CEO Jerry Yang had to resign and few months earlier Yahoo also fired Carol Bartz – replacement of Jerry. Today company has received two shocking news; its CTO Raymie Stata has stepped down and, second, its revenue has dipped 24 percent. Yahoo has announced that its revenue and revenue costs both are down and GAAP revenue has declined 24 percent year over year. One of the most important reasons for such setback is Yahoo search agreement with Microsoft. As per the agreement, both the companies will bear the equal cost – which is required to run the Yahoo search – under the alliance. However when we take in care of this quarter earning, $4 million is reimbursed from Microsoft. Where as the total cost on Yahoo’s end was more than $ 150 million which had crossed the limit of reimbursements, set at the time of deal.

 “We have a better product planning process in cycle,” said Tim Morse interim chief executive.

Below points are enlightening Yahoo’s third quarter financial report for 2011:

  • Revenue of Yahoo excluding traffic acquisitions costs is $1,072 million, decline by 5 percent compared to third quarter of 2010, which was $1,124 million.
  • Company’s Generally Accepted Accounting Principle (GAAP) revenue also slumps down by 24 percent to $1,217 million compared to $1,601 million in Q3, 2010.
  • Yahoo income from operations is also down by 6 percent $177 million compared to $189 million in Q3 of 2010.
  • Company net earning also wad down by 26 percent to $293 million compared to $396 million in Q3, 2010.
  • Yahoo net earning per diluted share was also down by 21 percent to .23 cents compared to .29 cents in Q3 of 2010.

Few days before, Microsoft has reported to reconsider its deal to buy Yahoo. However, there are many other companies who are showing interest to pocket Yahoo this time – if it’s put on Sale. One of the hot-shot names in the list of buyers is Alibaba, whose 40 percent shares are already owned by by Yahoo, bought in 2008.

Ash Munshi has replaced Raymie State as new Chief Technology Officer of Yahoo. Raymie Stata has served for a year and five months as CTO. He was with the company since 2004 and served on several architectural platforms.

On the Appointment of New CTO, Yahoo spokesperson said, “Ash has a well-established career managing successful global technology organizations at the most senior level with a laser focus on meeting and exceeding customer needs.”

Yahoo stocks take a dip of 1.43 percent after the announcement of its revenue and CTO crunch.

We hope Yahoo should soon be back to profit and performance and resolve all discouraging issues. Do you think an advice from you can help Yahoo to overcome all the problems? Let us know in comment section.



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