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”. Even though the company made $1.27 billion in revenue during the last quarter, it had a writedown of $4.5 billion.
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The planned restructuring announced on Tuesday includes the closure of offices in five locations, a paring down of its products, shifting more resources to mobile search, and the sale of some nonstrategic assets such as property and patents.
“Yahoo is a far stronger, more modern company than the one I joined three years ago”, Ms Mayer said. She added that this meant focusing on Yahoo’s mobile, video, social and “native offerings” to help drive online advertising revenue.
With her new plan, Marissa Mayer – CEO of Yahoo – wants to focus on Search, Mail and Tumblr as well as News, Sports, Finance and Lifestyle in “growth markets” such as the US, Canada, UK, Germany, Hong Kong, and Taiwan.
The company reported a loss of $4.43bn, or $4.70 per share, in the quarter, due to a large write-down to account for the lower value of some units.
Most analysts believe the strategic move would be to sell off the core business.
Chief executive Marissa Mayer, who joined Yahoo in 2012 from Google, has been trying to revive the internet pioneer’s core media and online advertising business by spending heavily to draw more users to its websites.
In an apparent concession to frustrated shareholders, Ms Mayer also said Yahoo’s board will consider “strategic alternatives” that could result in the sale of all the company’s Internet operations.
Yahoo chairman Maynard Webb said the board of directors believes that exploring additional strategic alternatives “is in the best interest of our shareholders”.
Financial results for Q4 2015 and the year as a whole were disappointing but not unexpected, with Q4 revenues up 1.6 per cent year-on-year to $1.27bn (£884m) and annual revenues growing by 7.6 per cent to $5bn. It will merge some digital magazines and close others, and will exit a number of legacy products, including games and smart TV, which it said have not met growth expectations. The company hopes that the plan will see modest and accelerating growth in 2017 and 2018.
“By the end of 2016, the company anticipates having approximately 9,000 employees and fewer than 1,000 contractors”.
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Much of the turnaround at Yahoo! revolves around its focus on MaVeNS, an acronym Mayer came up with to focus on the future of the company.
