Yahoo warns earnings will slip

Yahoo, the internet giant, has issued earnings predictions for the first quarter of 2001 sharply below what analysts had predicted.

Yahoo also announced that Timothy Koogle will step down from the post as chief executive, though he will remain chairman of the board.

"Yahoo now expects first quarter 2001 revenues will be in the range of $170-180m," the company said in a statement.

Analysts had forecast revenues of around $232m.

"The CEO change will be perceived as positive by [Wall] Street, but combined with the warning it might be different," said Bancorp Piper Jaffray internet analyst Safa Rashtchy.

Diving shares

Trading in Yahoo shares was suspended on Wednesday morning ahead of the announcement.

The shares, which slumped 6.3% in the seven minutes before suspension, plunged a further 19% when trading in the stock resumed on Thursday.

Yahoo shares had slid to $16-7/8 within an hour of the opening of the Nasdaq stock exchange.

The shares were worth $205 a year ago.

In Tokyo, shares in Yahoo Japan slid sharply, diving 12.21% percent, or 900,000 yen, to 5.75m.

Advertising sales

The Yahoo earnings warning was due to weaker advertising earnings, caused by reduced marketing spend by firms worried about an economic slowdown in the US and elsewhere in the world.

Advertising revenue accounts for about 90% of the company's earnings.

As the firm progressed a search for a chief executive to help boost profitability, AOL's joint chief operating officer Bob Pittman, who some had tipped for the post, ruled himself out of the running.

"I am delighted where I am," Mr Pittman said on Thursday.

The company is also seeking replacements for other senior officials.

The managing director of Yahoo Europe, Fabiola Arredondo, and the head of its Asian operations, Savio Chow, both resigned recently.

Their departures were seen as a double blow for Yahoo.