Sunnyvale, Calif.-based Yahoo! Inc., losing search market share to Google Inc., is at a restructuring crossroads. The company's 2007 fourth-quarter results are tugging the share price down: Net income went from $268.7 million in the fourth quarter 2006 to $205.7 million, about a 23.4% drop. As expected, co-founder and CEO Jerry Yang (he's eight months into the CEO job), is
reducing his work force by about 1,000 workers. No word was given on which division would feel the axe most.
Yahoo! also
announced a deal with AT&T Inc., which it has allied with since 2001. The two will share ad revenue on search and display capabilities from either a mobile handset or a PC. More on the tech front: Yahoo!
brought in Aristotle Balogh as its chief technology officer, reporting directly to Yang. Balogh was previously EVP, chief technology officer and head of global product design for VeriSign Inc., where he spent 10 years.
In this
Deal.com article, analyst David Garrity of Dinosaur Securities LLC argues that Yahoo! should expand its online advertising business following the 2007 acquisitions of behavioral advertising firm BlueLithium Inc. and online ad exchange Right Media Inc. Possible targets, Garrity said, include ValueClick Inc. and Customer Acquisition Network Holdings Inc.
Garrity also points out some other M&A opps:
- For career services, Yahoo! could acquire Monster Worldwide Holdings Inc.
- In travel services, purchase Priceline.com Inc., Expedia Inc. or Orbitz Worldwide Inc.
- And they can beef up their online photo-sharing service, Flikr, by adding Shutterfly Inc.
Yahoo! shares were down almost 9% in midday trading to $18.99, the low end of their 52-week range: $18.72 - $34.08. And, of course, there's talk of a possible
hostile takeover of Yahoo!. -
Baz HiralalSee the earnings results, which include full-year 2007
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