UPDATE: Yahoo CEO Says 6% Operating Margin 'Unacceptable'
28 Oktober 2009 - 8:15PM
Dow Jones News
SAN FRANCISCO (Dow Jones)-Yahoo Inc.'s (YHOO) Chief Executive
Carol Bartz said Wednesday that the Internet giant's 6% operating
margin is "unacceptable" and she vowed to regain the respect the
company has lost over the past several years.
"Today is the beginning of a journey back to respect," she said
in an introductory presentation during the company's Analyst Day
event webcast over the Internet.
A series of executives then took the stage to highlight the
company's reach and scale as a media brand, as well as to discuss
Yahoo's efforts to speed up the development of new technologies and
products.
The company's chief financial officer, Tim Morse, was expected
to provide more color on the company's financial situation when he
takes the stage in the afternoon.
"The most important note thus far is Carol Bartz calling out the
company's operating margin as unacceptable, which in our view
suggests we will see margin expansion in 2010 regardless of revenue
growth," Piper Jaffray analyst Gene Munster wrote in a note.
Referring to ongoing questions about Yahoo's vision and
direction, Bartz reiterated that the company shouldn't be thought
of as a search or display company. She said Yahoo is a broad-based
Internet technology company that competes with a wide range of
content sites, including social network Facebook, news provider
CNN, sports titan ESPN and gossip page TMZ.
Chief Technology Officer Ari Balogh said Yahoo's model is very
simple: Engaging its broad audience and gathering insights about
their behavior so the company can provide them with better online
experiences and better targeted ads.
"We deliver that at scale; at a scale that very few can even
conceive of," he said.
He added that Yahoo has the technology, talent and brand it
needs to succeed. "This is all about how we execute," Balogh
said.
Yahoo last week reported that its third-quarter profit surged
due to cost cutting and asset sales, even as revenue fell 12%
compared with a year ago. Relieved analysts said the results
indicated that Bartz has made some headway since taking over the
company in January.
But Bartz, who was named CEO amidst the worst advertising slump
in decades, still has to prove she can reinvigorate the struggling
Internet giant and convince investors, employees and customers that
she has a strong vision for the company.
Shares in Yahoo were down 3.3% at $16.14 in midday trading.
-By Scott Morrison, Dow Jones Newswires; 415-765-6118;
scott.morrison@dowjones.com