Internet search company Yahoo has warned that its revenue will again slide this quarter as it loses traffic to Google and Facebook.
Yahoo last night reported its third consecutive quarter of declining page views on its websites. CEO Carol Bartz, who after two years in charge is facing increasing pressure to turn Yahoo around, promised investors that revenue growth would return in 2011's second half once a tie-up with Microsoft takes off.
The weaker than expected first-quarter sales forecast came the same day Yahoo announced its second round of lay-offs in six weeks, about 1% of its global workforce. In contrast, rival Google is preparing its biggest year of hiring ever in 2011.
Yahoo has struggled to contain costs and kickstart revenue growth, but Bartz said the company was committed to investing for growth and defended the company's progress during Tuesday. She cited new features in the company's web search product and the successful combination of Yahoo's search advertising service in the US and Canada with Microsoft in October.
Under the ten-year deal, Yahoo will share 12% of its search advertising revenue with Microsoft.
Chief financial officer Tim Morse said Facebook competition was not hurting Yahoo's display advertising business, in which revenue increased at an annual rate of 14% to $635m in the final three months of 2010.
Net revenue, which excludes revenue shared with website partners, totalled $1.2 billion in the three months, down from $1.26 billion a year earlier. Yahoo projected that net revenue in the first quarter will range between $1.02 billion and $1.08 billion.
Yahoo said its net profit in the fourth quarter was $312m, or 24 cents a share, compared with $153m, or 11 cents a share, a year earlier.
