San Francisco - Yahoo reported an 18 per cent drop in second
quarter profits Tuesday putting more pressure on the company in the
aftermath of a shareholder revolt and the controversy over
Microsoft's aborted attempt to buy the company.
The Silicon Valley internet services company said it earned 131.2
million dollars, or 9 cents a share, compared to 161 million dollars,
or 11 cents a share a year ago. Revenue for the three months ended
June 30 was 1.8 billion dollars, compared with 1.7 billion dollars in
the same quarter a year earlier.
Analysts said the company was hit by the slowing economy which
reduced internet advertising, and on increased spending to improve
its search business. Yahoo founder and CEO Yahoo's chief executive,
Jerry Yang, said the fruits of those investments would soon become
apparent.
'Yahoo is executing against its strategy, and we believe is well
positioned for long-term growth and maximizing stockholder value,'
Yang said in a statement. 'We are seeing validation that we have the
right strategy as we continue to make transformational investments
that position us to take advantage of pivotal trends driving growth
on the Internet.'
Yahoo released the results a day after announcing a settlement
with corporate raider Carl Icahn, who had been trying to oust the
board and revive the company's sale to Microsoft. Microsoft had
tendered a 47.5 billion dollar bid for the company, but withdrew the
offer after Yahoo demanded a higher price. Under the agreement with
Icahn, Yahoo agreed to expand the board by two members and give
Icahn's representatives up to three seats on the board.
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