(Associated Press via NewsEdge) Yahoo will end a disappointing year with yet another financial letdown in the fourth quarter, but executives offered hope for a turnaround next year.
After announcing a 38% drop in Yahoo's third quarter profit and dimming the revenue outlook for the crucial holiday shopping season, Yahoo chairman Terry Semel acknowledged the company's recent difficulties and vowed to fix them with a 'back to basics' approach.
The promise helped lift Yahoo's sagging stock price, which increased by more than 3% in extended trading.
Semel punctuated his pledge by announcing that Yahoo had finally started to roll out much-anticipated improvements to its system for selling and distributing ads tied to search terms and other topics displayed on Web pages.
Yahoo also acquired a provider of online marketing tools and bought a 20% stake in Right Media Exchange, an advertising bazaar.
The improved ad platform, which Yahoo abruptly delayed three months ago, is considered the key to the company's comeback efforts. The changes are not expected to begin boosting Yahoo's profits until next year.
'I am not satisfied with our current financial performance, and we intend to improve it,' Semel assured analysts during a conference call Tuesday. 'We are not exploiting our considerable strengths as well as we should be.'
Yahoo missed its financial targets in the third quarter, a shortfall that investors already knew was coming. Semel braced Wall Street last month by warning that Yahoo's revenue had slipped late in the quarter because of a decline in automobile and financial services advertising.
© 2006 The Associated Press
© 2006 Dialog, a Thomson business. All rights reserved