Yahoo Stuck In Online Advertising DoldrumsYahoo Stuck In Online Advertising Doldrums

Amid the roughest ad market of its life, Yahoo reported last week that fourth-quarter sales fell almost 40% from a year ago. The Internet portal lost $8.7 million on revenue of $188.9 million, compared with a loss of $97.8 million on revenue of $310.9 million for the same period last year. Yahoo (YHOO--Nasdaq) also says president and chief operating officer Jeff Mallett will leave in April to pursue other interests. Yahoo increased its 2002 forecast to a $70 million to $100 million operating profit on revenue of $750 million to $800 million.

Online ads provide about three-quarters of the company's revenue, a figure Yahoo hopes to reduce to about 50% in two years by expanding corporate offerings such as enterprise portals. Notes Kaufman Bros. analyst Paul Kim, "You can't get away from the fact that Yahoo is a media company, and the main driver of media is advertising."