Yahoo will end a disappointing year with yet another financial letdown in the fourth quarter, but executives offered hope for a turnaround next year, an Associated Press report said.
The report said that after announcing a 38% decline in Yahoo's third quarter profit and dimming the revenue outlook for the crucial holiday shopping season, Yahoo chairman Terry Semel acknowledged the company's recent difficulties and vowed to fix them with a 'back to basics' approach.
The promise helped lift Yahoo's sagging stock price, which increased by more than 3% in extended trading, the report said.
Semel punctuated his pledge by announcing that Yahoo had finally started to roll out much-anticipated improvements to its system for selling and distributing ads tied to search terms and other topics displayed on Web pages, the report said.
Yahoo also acquired a provider of online marketing tools and bought a 20% stake in Right Media Exchange, an advertising bazaar.
The improved ad platform, which Yahoo abruptly delayed three months ago, was considered the key to the company's comeback efforts. The changes were not expected to begin boosting Yahoo's profits until next year, the report added.
'I am not satisfied with our current financial performance, and we intend to improve it,' Semel was quoted as saying. 'We are not exploiting our considerable strengths as well as we should be.'
Yahoo missed its financial targets in the third quarter, a shortfall that investors already knew was coming. Semel braced Wall Street last month by warning that Yahoo's revenue had slipped late in the quarter because of a decline in automobile and financial services advertising, the report said.