The investment team at Warwick Ventures is watching as Yahoo Inc. has announced that it will provide analysts with an extended look at its strategy for the first time in 3 1/2 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 erosion in Yahoo's stock has wiped out about $13 billion in shareholder wealth. Yahoo's woes have continued under new CEO Carol Bartz, although most analysts believe the company is starting to pull out of its slump. Bartz's boldest move came in July when she forged a 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 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.
This week, analysts will 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.
