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Ahead Of The Bell: Yahoo To Meet With Analysts

The Associated Press

SUNNYVALE, Calif. (AP) — Yahoo Inc. will provide analysts with an extended look at its strategy for the first time in 3½ years, giving its executives a chance to explain how they plan to make up for the dramatic drop in the Internet company's stock price since the last meeting.

The Wednesday presentation, scheduled to run from 11 a.m. to 6 p.m. EDT, will be webcast at http://yhoo.client.shareholder.com/.

A lot has changed since Yahoo hosted its last analyst day in May 2006, starting at the top.

The company, based in Sunnyvale, Calif., is now being led by Silicon Valley veteran Carol Bartz, who succeeded Yahoo co-founder Jerry Yang as chief executive at the beginning of this year. Yang had supplanted Terry Semel, the CEO at the time of Yahoo's last analyst day.

Semel and Yang both stepped down largely because they weren't able to reverse an earnings slump that has decimated Yahoo's market value. The company's shares closed Tuesday at $16.69 — a 45 percent decline from their price of $30.11 after its last analyst day. The technology-laden Nasdaq composite index, which includes Yahoo, is down by 4 percent during the same period.

The erosion in Yahoo's stock has wiped out about $19 billion in shareholder wealth.

Yahoo's woes have continued under Bartz, although most analysts believe the company is starting to pull out of its slump.

Bartz so far has cut costs by trimming Yahoo's payroll and shedding unpopular services while trying to polish the company's brand with a $100 million marketing campaign that began a month ago.

But Bartz's boldest move came in July when she finally forged a long-discussed partnership with rival Microsoft Corp.

Under the proposed 10-year alliance, Microsoft will process the U.S. search requests on Yahoo's Web site and deliver much of the advertising tied to those inquiries. The deal, which still requires regulatory approval, is designed to lower Yahoo's expenses on search technology so it can focus on developing products and services that will encourage people to spend more time on its Web site instead of at increasingly popular online hangouts such as Facebook.

Analysts are expected to try to get a better handle on how the Microsoft partnership is progressing as well how much longer it will be before Yahoo's Internet ad sales bounce back. Yahoo's ad revenue, the company's main source of income, decreased by 12 percent during the first nine months of the year, and management already has predicted sales will be down again in the fourth quarter.