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Yahoo gets 28% decline in net profit

20 April 2011 14:27 (UTC +04:00)

Baku - APA-Economics. ahoo has hinted that its partnership with Microsoft is partly to blame for a 24 per cent drop in revenue and a 28 per cent fall in net profit, Inquirer reported.

Yahoo brought in $1.2 billion (Â£733 million) in revenue for the first three months of the year, nearly a quarter drop from the same period last year, while net profit came in at $223 million (Â£136 million), well short of the $310 million (Â£189 million) it earned last year.

Yahoo’s CEO, Carol Bartz indicated that revenue won’t increase to the level it was before the Microsoft deal until the end of the year, according to the BBC, suggesting that the partnership might have had an adverse effect on the company’s financial results.

Yahoo teamed up with Microsoft last year to power web searches with Microsoft’s Bing search engine, an effort to steal back lost market share from rival Google.

That deal is under threat now, with Yahoo revealing that it’s waiting on improvements to its technology before rolling out further changes. The partnership is effectively on hold, with Yahoo saying that it has so far failed to pay off.

In many ways, however, the problem boils down to Yahoo itself, which Bartz has been attempting to rescue over the past two years. Yahoo has seen such a sharp drop in revenue and profits this year partly because it received a capital injection from Microsoft last year as part of their deal. Without a similar influx of cash, Yahoo has to go it alone - and that doesn’t seem to be getting it very far.

Despite the declines, the company still brought in more revenue than analysts expected, leading to a 3.5 per cent increase in share value. Bartz attempted to capitalise on this by suggesting that the company’s turnaround is still "on schedule" and "heading in the right direction". However The INQUIRER doesn’t think that ’down’ is really the right direction at all.