Yahoo 4th Quarter Revenues Went Up in 2007, But Overall Net Income Suffered

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The reports and statistics are out, and as I was looking over Yahoo’s financial report for 2007, all I saw was increase in this, and increase in that. But of course, we should all not be mislead by this report. Actually, you just have to open your eyes a little bit wider to see the bigger picture.

Amidst all the increases in Yahoo’s variables as enumerated in the financial report, you could clearly see on which part Yahoo faltered in 2007. So, far I’ve noticed the following:

for Yahoo’s Full Year 2007 Financial Results:

  • Marketing services revenues from Affiliate sites were $2,417 million for 2007, a 5 percent decrease compared to $2,556 million for 2006.
  • Operating income for 2007 was $695 million, a 26 percent decrease compared to $941 million for 2006.

for Yahoo’s Segmented Financial Results:

  • United States segment operating income before depreciation, amortization, and stock-based compensation expense for 2007 was $1,434 million, a 1 percent decrease compared to $1,452 million for 2006.

You don’t have to be a financial analyst to deduce from these statements that indeed Yahoo is not doing well with its income-generating programs last year. And this could very well justify the need for the recent announcement regarding Yahoo’s planned mass layoffs.

After looking at these financial reports, I couldn’t agree more on the advice that Yahoo needs a reboot.

Arnold Zafra
Arnold Zafra writes daily on the announcements by Google,, Yahoo & MSN along with how these announcements effect web publishers. He is currently building three niche blogs covering iPad News, Google Android Phones and E-Book Readers.
Arnold Zafra
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  • Chris Blackwell

    We have to route for Yahoo, we really do. The industry needs the competition and just a decent player to keep Google honest and keep the innovation flowing. I’m a large Google user myself, but I route and hope for Yahoo!

  • Arnold Zafra

    Hopefully, the hands that rocks the Yahoo cradle will take all the buzz about its 2007 dismal performance, as an inspiration to wake up and do something about it.

  • Loren Baker, Editor

    I think one common misconception in the public view of Yahoo is their content network vs. their search offering. If the major hit at Yahoo will be because of display advertising, which usually brings in a massive CPM, there should not be as large as an effect on their Yahoo Search Marketing revenue.

    Yahoo is much larger than search, as search is one part of their overall network and company. It would be outstanding to see search rise above the content and display advertising dependency at Yahoo, and if their laying off of 20% of their workforce comes to fruition, which should lead to much lower operating expenses, that probably will be the case… as long as not a major part of those layoffs are in search itself.

  • Search Engine Panel

    Interesting post. It looks like it might be time for Yahoo to separate it’s mobile, publishing, advertising, and other internet properties. I think a clearer focus and division of its units will be much more beneficial.