Despite Marissa Mayer’s continued efforts as the CEO since 2012, there has not been any encouraging signs for Yahoo’s dwindling businesses — across all formats. And now the company seems to be focussing on fewer things and increasing profitability rather than venturing into new areas and increasing market its share.
This was evident from during the fourth quarter earnings call this week when Yahoo announced its efforts to simiplify the company under an “aggressive stratgeic plan”.
The plan involves trimming down its product portfolio focssing more on things which are working and consolidating or shutting down the others.
It also involves shutting down its offices in Dubai, Mexico City, Buenos Aires, Madrid, and Milan, and laying off about 15% of its workforce. According to the company, this will result into a 42% smaller workforce as compared to the year 2012. The move is expected to reduce its operating expenses by more than $400 million by the end of 2016.
This is a strong plan calling for bold shifts in products and in resources. The plan announced today builds from that achievement and will dramatically brighten our future and improve our competitiveness, and attractiveness to users, advertisers, and partners,
As far as earnings are concerned, Yahoo did manage to beat the analysts’ expectations who had expected revenue of $1.19 billion and earnings of $0.13 per share this quarter. However, Yahoo posted a revenue of $1.27 billion and $0.30 earnings per share for the fourth quarter.
This was a marginal increase from $1.25 billion in revenue but earnings per share fell down from $0.33 per share during the same period last year.
Yahoo laid down a four-point plan for growth during the investor call-
- grow user engagement by focussing on its key strength areas( three global platforms: Search, Mail, and Tumblr, and four verticals: News, Sports, Finance and Lifestyle and two core offerings in advertising namely Gemini and BrightRoll);
- focus on mavens revenue growth which grew 45% in 2015 by exceeding $1.6 billion in revenues;
- simplify the business to improve execution (exiting legacy products, including Games and Smart TV, which have not met growth expectations); and
- efficiently align resources by executing on a number of additional cost-savings efforts which largely involves reduction in its employee force
Through this plan, the company is expecting to get on growth track again by 2017 and 2018. However, it remains to be seen whether the new plans will affect the company fortunes in a positive manner or will lead to another failed attempt by Mayer, therby further reducing the investor faith on her.