Yahoo warns of difficult year ahead

Yahoo has warned that its sales for 2001 could be hurt by the slowing online advertisement spend and softening economy, despite meeting Wall Street's expectations for its most recent quarter.

Revenue for the three months ended 31 December increased 53 per cent to $311m, compared with $203m a year ago. Including a one-time charge of $163m, Yahoo reported a loss of $98m, or 17 cents per diluted share, compared to a profit of $38m, or six cents per diluted share, a year ago.

Excluding the extraordinary item, net income increased in line with analysts' expectations to $80m, or 13 cents per share, compared to pro forma net income of $56m, or nine cents per share, during the fourth quarter of 1999.

Yahoo is keen to move away from relying on online advertisements for revenue and has been working to increase its business and enterprise services which include the Corporate Yahoo portal and Yahoo Website Services.

Sue Decker, the company's chief financial officer, said: "Over the next year, we expect to see some short-term effects from the apparent softening economy and continued realignment of our client base."

For 2001, Yahoo expects revenue to reach between $1.2bn and $1.3bn, compared to $1.1bn during 2000, with marketing services and commerce accounting for up to 85 per cent of sales and business services growing to between 15 and 20 per cent.