Yahoo’s new CEO Says Company Needs to Perform Better

February 23, 2012

Unlocking Word Meanings
Read the following words/expressions found in today’s article.

1. revenue (n.) – income earned from a particular source
Example: The company is losing money because of its revenue continues to decrease.

2. narrow down (idiom) – to cut down several options or choices to find the most important ones
Example: The twenty contestants were narrowed down to the three best performers.

3. promising (adj.) – showing possibility of development or success
Example: The restaurant’s new menu seems like a promising way to attract more customers.

4. priority (n.) – something given more attention
Example: The student studies hard because his priority is to finish college and find a stable work in the future.

5. core (adj.) – pertaining to the most important part
Example: The institution established core principles to be followed by all its members.

Read the text below.

Newly appointed Yahoo Inc. CEO Scott Thompson plans to aggressively work on strengthening the company’s core business to improve its performance after revenues have declined towards the end of 2011.

In the last few months of 2011, Yahoo reported $1.17 billion in net revenue, which is significantly lower than the $1.205 billion the company reported the same time in 2010.

Thompson says he will make decisions quickly, and organize Yahoo’s 14,000 employees to move fast and with force to address this big decline. Thompson has not revealed what strategies they will use, but says that the company’s board has narrowed down business options to the most promising ones.

The company’s highest priority will be its display advertisement business, Yahoo’s main source of revenue. Income from display ads fell in the last quarter of 2011, contributing only a total of $612 million, because of competition from Google and Facebook. The financial crisis in Europe has also affected Yahoo’s performance, making Thompson cautious with his plans.

But while the company will focus on the core business, Yahoo will still be open to new opportunities and revenue sources, Thompson explains.

Despite the decline, the company expects better results for 2012. Several large advertising companies have already committed to making use of Yahoo’s display advertisements. Yahoo has also projected that its net revenue for the first three months of the year will range from $1.025 billion to $1.105 billion.

According to Thompson, the company’s revival will rely heavily on the data it has collected from its 700 million users. Using the data as an advantage, Yahoo can provide better products and services according to customers’ and advertisers’ needs, he adds.

Viewpoint Discussion
Enjoy a discussion with your tutor. 

Discussion A

·         What do you think are the factors why some companies lose money?
·         Can you think of ways how companies can avoid losing revenue?

Discussion B

·         In managing a company, is it better to use one business strategy, or to try using different strategies? Why?
·         If you own a company, what would be your top strategy in order to succeed?


February 23, 2012