Yahoo's profit and revenue fell sharply in the first quarter, ended March 31, 2009, as the beleaguered Internet company added a softening online ad market to its list of woes.
Yahoo had revenue of US$1.58 billion, down 13 percent from the first quarter of 2008 but higher than the $1.20 billion consensus expectation from analysts polled by Thomson Reuters.
Meanwhile, net income fell 78 percent to $118 million, or $0.08 per share, compared to $537 million, or $0.37 per share, in the first quarter of 2008, the company said Tuesday.
On a pro forma basis, which excludes certain one-time items, Yahoo had net income of $206 million, or $0.15 per share, down 16 percent and 17 percent, respectively, compared to the first quarter of 2008 but exceeding by seven cents per share analysts' expectation.
As had been rumored, Yahoo also announced it will lay off employees, its third major job-cutting round since early 2008. This time around, Yahoo will let go 5 percent of its staff worldwide. Yahoo ended 2008 with 13,600 employees, so this would mean that about 680 people will be laid off. Yahoo handed out pink slips to about 2,600 employees in two rounds of layoffs last year.
In a statement, CEO Carol Bartz said the company "experienced pressure" in display and search advertising, but added that Yahoo will benefit from the recovery of brand advertising when it happens.
"We believe Yahoo remains one of the most compelling advertising buys on the Internet," said Bartz, who took the helm of the company in January.