• BusinessWeek/Online Media Daily, Wednesday, January 28, 2009 11:30 AM

Yahoo may have announced better-than-expected fourth quarter earnings, but analysts still see few signs for optimism for the laboring Internet giant, despite recent cost cuts and a new CEO. The company suffered a net loss of $303 million due to the costs associated with layoffs and office closings, as well as a drop in value of its overseas properties. Its first quarter guidance was also weak.

As Sanford Bernstein analyst Jeffrey Lindsay said, "We see no growth path forward. The only thing that's going to excite investors is a transformational move, and that could take months or quarters." Indeed, new CEO Carol Bartz admitted as much during a conference call with reporters. She said she needed time to talk to more people inside the company about what direction to take it in. Investors are unlikely to give her much time.

As BusinessWeek says, "Bartz is taking the helm of a company facing considerable challenges." The bad economy is taking a definite toll on the growth of display advertising. According to eMarketer, display ads will only grow 7% this year, topping $4.9 billion. And most of that growth won't be directed towards Yahoo, as the price per thousand viewings of display ads sold directly by Web sites is down 20% or more, the BusinessWeek report claims. Worse, a recent report from PubMatic shows that prices for remnant publisher inventory fell by as much as 54% last year.

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