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Yahoo 2008 outlook leaves a lot to be desired

After announcing a sharp drop in fourth-quarter profits on Tuesday, Yahoo issued a disappointing outlook for this year, suggesting that investors would have to wait until next year for a turnaround.

Yahoo also said that as part of its plan to revive its fortunes, it would cut 1,000 jobs by the middle of next month to reduce costs and narrow its focus to its most important businesses.

The company, however, said it planned to invest aggressively in some areas, like advertising technology and selected portions of its Internet portal, as it tries to capture a larger share of online ad dollars. Since the company said laid-off employees could apply for new jobs, the net effect on the company's work force, which recently grew to 14,300, was not clear.

Chief executive Jerry Yang (楊致遠) warned investors of ongoing "headwinds" this year. Projections for revenue growth and profitability were at the low end of analysts' expectations.

Yahoo executives said those projections were largely independent of the slowdown in the US economy, noting that it was too early to predict whether weak financial, travel and housing sectors would hurt online advertising.

In a sign of growing impatience, investors reacted negatively to the announcements, which were made after the markets closed. In after-hours trading, Yahoo shares fell more than 10 percent, to levels not seen in more than three years.

Yahoo said its fourth-quarter net income fell to US$206 million, or US$0.15 a share, down 23 percent year-on-year. Revenues grew 8 percent to US$1.8 billion.

Yang has promised to focus on three objectives: becoming a starting point for the most consumers on the Web; making the company a top choice for marketers seeking to place ads on sites across the Web; and opening Yahoo's technology infrastructure to third-party programmers and publishers.
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