Yahoo Admits Weak Q1 Potential Job Cuts
Yahoo has warned that revenue is likely to be down in its first fiscal quarter as it looses out to web rivals Facebook and Google.
In contrast, the company also said it is preparing for its biggest ever year of hiring.
"This is still a company in transition that hasn't really got where it needs to be yet," said UBS analyst Brian Pitz.
Yahoo has struggled to contain costs and jumpstart revenue growth.
In October, it began outsourcing its search advertising service in the US and Canada to Microsoft, in keeping with the 10-year search partnership the two sealed in 2009. Under the deal, Yahoo will share 12 per cent of its search advertising revenue with Microsoft.
"The basic problem is they are not getting the new incremental dollars that are coming from advertisers," Pitz said. "A lot of the new consumer electronic product dollars are going straight to social media or going to Google's Doubleclick.
Chief financial officer (CFO) Tim Morse said Facebook competition was not hurting Yahoo's display advertising business.
"All impressions aren't created equal. With the big customers and branded advertisers, and the premium dollars being spent, we really aren't seeing that kind of competition," he said in an interview with Reuters.
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