Yahoo! Updates First Quarter 2001 Financial Guidance; Company Begins Search for New
Chief Executive OfficerKoogle to Remain Chairman of the Board; Company Announces
Stock Repurchase Program
SANTA CLARA, Calif., Mar 7, 2001 (BUSINESS WIRE) -- Yahoo! Inc. (Nasdaq: YHOO)
today updated previously reported financial guidance for its first quarter
financial results. Yahoo! also announced that its Board of Directors and senior
management have initiated a search for a new chief executive officer and have
authorized a stock repurchase program.
Yahoo! now expects first quarter 2001 revenues will be in the range of $170
million to $180 million. The company expects first quarter pro-forma EBITDA and
net income to be approximately break-even. Yahoo! said that its revised guidance
for the quarter primarily is the result of the weakening macroeconomic climate,
and the resulting shortfall in marketing spending by customers due to the
economic uncertainty. In addition, the transition in the company`s customer base
from pureplay Internet businesses to more traditional companies, which have a
longer media planning cycle, is occurring more rapidly than anticipated.
"All businesses in the United States are facing challenging economic conditions
that have weakened further in recent weeks, and as consumer confidence and
spending has deteriorated, a broad range of customers have delayed their
spending across all media formats until their economic outlook improves," said
Tim Koogle, Yahoo!`s chairman and CEO. "As a result, we expect revenues and
profits to be reduced most significantly in the marketing services area of our
business in the first quarter.
"We remain confident that Yahoo!`s strong set of core assets will enable us to
manage and execute through this short-term environment and emerge from it even
stronger in the long-term," Koogle said. "Our user base, page views and time
spent per user continue to grow, and our Business and Enterprise Services
business is solid."
"Even though Yahoo! is currently being affected by both the weak economy and a
client base that is transitioning to traditional marketers, we remain confident
that our business model will continue to demonstrate its effectiveness," said
Susan Decker, chief financial officer and senior vice president of finance and
administration. "Our balance sheet is extremely strong, providing us with
another solid foundation from which to weather the current environment. We are
evaluating our operating plans and investment priorities to determine which
operational changes to pursue that will lead to long-term shareholder value."
Yahoo!`s regularly scheduled first quarter earnings report is scheduled for
April 11, 2001, at which time the company intends to provide updated fiscal year
2001 financial guidance.
Chief Executive Search Initiated
Yahoo! also announced it has initiated an external search for a new chief
executive officer to bolster and augment the current executive management team.
Spencer Stuart & Associates, a world leader in senior executive search, has been
chosen to lead the recruiting effort and will work with Yahoo!`s Board of
Directors search committee.
"Yahoo! has grown tremendously over the past six years. The Board and I have
decided to continue to proactively building out our senior management bench
strength across the company in order to prepare for our next stage of growth,"
said Koogle. "We are excited about bringing in great new talent to complement
our existing team. The ideal candidate will have the proven ability to grow a
global business, as well as the vision, long-term drive and passion that are all
hallmarks of Yahoo!. I will continue as chairman and CEO until we complete our
search, at which time I will remain as chairman."
Yahoo! has made significant appointments to its executive team in recent weeks,
including a senior vice president of the company`s media unit; senior vice
president of major initiatives; a general manager of Yahoo!`s direct marketing
business in North America; a vice president of sales for its Business and
Enterprise Services organization; and a new managing director for Yahoo! Canada.
Stock Repurchase Program Approved
Yahoo! also today announced that its Board of Directors has authorized a stock
repurchase program. Yahoo! may acquire up to $500 million of its outstanding
common stock in the open market from time to time over the next two years,
depending on market conditions, share price and other factors. As of March 1,
2001, Yahoo! had approximately 565 million shares of common stock outstanding.