updated 01:00 am EDT, Wed April 18, 2012
Hints at closing down less-popular services
Speaking on an analyst conference call covering his first full quarter as CEO, Yahoo head Scott Thompson said that the company will focus on the services it does "really well," and may close or transition other services that are less popular. Saying "Yahoo has been doing way too much for too long," Thompson plans to shutter or consolidate some 50 Yahoo properties and will focus on the company's mail, financial site and sports coverage.
The search and specialty news site reported flat financial results, though profits were up. Thompson cut over 2,000 employees two weeks ago, mostly in the entertainment-based divisions, saying it needed to return to its twin goals of satisfying users and advertisers.
He has also enacted a major reorganization of responsibilities, but said he isn't yet satisfied with the results. The troubled company has seen steady erosion of its marketshare, the loss of its original founders and other problems as it has faced competition from the likes of Google and Facebook.
One of the things Thompson plans to do still is leverage more of the information Yahoo has on its customers to make advertising more effective and personalized, along with learning more about what enhancements to its core services. The fate of separately-run services such as Flickr could be affected by the new focus, despite its popularity. The company has also begun striking back at perceived patent violations, suing Facebook over ad and messaging patents.
Thompson told analysts that Yahoo doesn't need to "reinvent" itself so much as improve the user experience, making the site more inviting for visitors than its biggest competitor, Google -- which has worked to become all things to everyone. He added that he felt the company had lost focus and "stifled innovation" in following a similar path. The consolidation of services may produce a "modest" decrease in revenue, Thompson warned, but would likely be offset by increased margins. He said the company is shooting for 20 percent margins, excluding traffic acquisition costs.