LONDON (Brand Republic) - Shares in internet portal Yahoo! dropped by up to 20% in after-hours trading last night, after chief executive Tim Koogle resigned the position and warned that earnings would fall far short of Wall Street forecasts.
A drop in advertising revenues has meant that first-quarter revenues will be $170m-$180m (£115.6m-£122.4m), and the company will only break even in the quarter. Analysts had forecast revenues of about $232m (£157.8m).
Koogle said, 鈥淎ll businesses in the United States are facing challenging economic conditions that have weakened further in recent weeks and, as consumer confidence and spending has deteriorated, a broad range of customers have delayed their spending across all media formats until their economic outlook improves.鈥
Yahoo! has 185m users and is one of the few profitable dotcoms. However, some analysts have expressed concern in the past over the fact that advertising sales account for about 90% of Yahoo!鈥檚 earnings.
Yahoo! has no immediate successor in line for Koogle, who has been with the company since 1995. He will remain as Yahoo!鈥檚 chairman and will stay on as chief executive until a replacement is found.
The company鈥檚 share price closed at $21 (£14.28) on Nasdaq last night, but in after-hours trading fell as low as $17.88 (£12.16), its lowest since September 1998.
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