Unveiling its third quarter financial results, Yahoo said it plans to slash costs by $400 million from its annual expenses of $3.9 billion in the next few months.
Global profits fell from $151m in the third quarter last year to $54m in the same period this year. Pre-tax profits outside of the US declined 7% to $119m while US pre-tax profits tumbled by 14% year on year to $291m. Meanwhile, US revenues totalled $1.28billion in the third quarter, up from $1.19billion a year earlier. International revenues fell from $572.6m in the third quarter of last year to $506.5m this year.
Jerry Yang, co-founder and chief executive of Yahoo, said: "The steps we are taking this quarter should deliver not only near-term benefits to operating cash flow, but should also substantially enhance the nimbleness and flexibility with which we compete over the long term."
Yahoo axed around 1,000 workers in February only to replace them within a few months. According to some US reports, Yahoo has actually increased its global headcount by 1,400 during the last two quarters to 15,200.
Although Yahoo's shares rose by 5% to $12.70 the level is far below the $33 a share Microsoft offered in May for Yahoo.
To allay investors, in recent months, Yahoo has been focusing on several key initiatives. Chief among these, in September, Yahoo unveiled the first significant details of its new ad trading platform, ATP, which it hopes will allow it to dominate online display advertising in the same way that Google dominates search.
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