YAHOO! Inc, the second-ranked Internet search engine, tumbled 9.8 percent in German trading after announcing plans to cut 1,000 jobs and disappointing investors with its sales forecast.
Yahoo! shares fell US$2.04 to US$18.77 as of 10:25am in Frankfurt yesterday. Yahoo! fell as low as US$18.45 in extended trading on Tuesday. It was the lowest price since 2003, Bloomberg News reported. After losing market share to Google Inc, Yahoo! now faces an economic slump and slower spending by online advertisers. The company's investments in advertising technology have failed to cut Google's lead or win back business lost to social-networking sites such as News Corp's MySpace and Facebook Inc. That's led to eight straight quarters of declining profit.
"There's a real concern about how this company is going to return to real solid, strong growth," Peter Dunay, investment strategist at New York-based Leeb Capital Management, said in an interview with Bloomberg Television. Leeb manages US$160 million.
Excluding traffic-acquisition costs, sales will climb to between US$1.28 billion and US$1.38 billion this quarter, the company said on Tuesday after the close of trading on the Nasdaq Stock Market.