Yahoo! president to step down
Published: 17 Jan 2002 17:20 GMT
Yahoo! president and chief operating officer Jeff Mallett announced on Wednesday that he would resign, as the Web portal reported fourth-quarter earnings that exceeded Wall Street expectations.
Shares of Yahoo! surged nearly 10 percent on Thursday morning in heavy trading. The stock was up $1.74 to $19.61 on the Nasdaq. Wall Street analyst reports on Thursday were upbeat about the company's performance and execution.
The company posted a net loss of 2 cents a share for the fourth quarter. It saw revenue plunge 39 percent to $188.9m from $310.9m in the same period last year. Still, Wall Street expected the company to report revenue of $170m, according to research firm First Call.
For the year, Yahoo! reported revenue of $717.4m, down from $1.1bn for 2000. First Call's consensus estimate expected 2001 revenue to reach just $699m.
Looking forward, the company said it expects revenue between $160m and $180m for the first quarter of 2002, and between $750m and $800m for the full year.
Good news for Yahoo! could have a ripple effect beyond the company, which investors regard as a gauge of the health of the Internet media business in general. Investors have been watching for signs of a bottom for the beleaguered sector after three straight dips in quarterly sales last year. US Internet ad sales fell 8.4 percent to $5.5bn in the first nine months of 2001, according to a December report from industry trade group the Interactive Advertising Bureau.
"While 2001 was a year of challenges and transition, Yahoo! adapted and executed to end the year on a high note, with fourth-quarter revenues and income exceeding the business outlook we previously provided," chief executive Terry Semel said in a statement. "As we reorganized the business and reduced costs throughout the year, Yahoo managed through the difficult environment."
Throughout the company's history, many industry observers say co-founders Jerry Yang and David Filo provided the spirit behind Yahoo!, while Mallett supplied the guts.
Mallett was at the center of Yahoo!'s fabled ascension from a Stanford trailer park to a fearless leader of the new media revolution. His management style reflected the evolution of the company: fast, hard-charging, competent and in possession of a seemingly impenetrable knowledge of the changing world of the Net.
A former member of the Canadian national soccer team, Mallett landed at Yahoo! after a short career as an entrepreneur and a stint at software maker Novell. Recruited in 1995 as Yahoo!'s 12th employee, he quickly became a dot-com star and a millionaire many times over.
But when the Internet economy began to stagger, so did Mallett's run in the company. After Yahoo!'s board of directors ousted chief executive Tim Koogle in March 2001 and began searching outside the company for a replacement, the writing was on the wall. Since Semel started in May, the biggest question in the minds of many Yahoo! executives and insiders was not whether Mallett would resign, but when.
Colleagues praised Mallet for his continuing contributions to the company through the course of Yahoo!'s changes this year.
"In the history of world, look to see how many brands were created in five years that have (such) enduring strength as Yahoo!," Yahoo! chief financial officer Susan Decker said in an interview.
Mallett will remain in his position through April and will be a member of the board of directors until the company's stockholder meeting this spring. Yahoo! said it expects to outline a succession plan before he leaves.
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