In today’s long and highly anticipated quarterly earnings call with investors, Yahoo chief executive officer Marissa Mayer shared plans to simplify the business, including merging or shuttering some of its digital magazines, which have grown to at least 15 in the U.S. Mayer did not specify which ones would be affected, but did offer that the news, sports, finance and lifestyle categories were strong. She also shared that Yahoo would lay off 15 percent of its total staff in the coming year.
In the fourth quarter of 2015, Yahoo lost $4.3 billion, on revenue of $1.27 billion.
The company was down 10 percent in the number of paid clicks and down 7 percent in search click-driven revenue in the fourth quarter, compared with a year earlier.
Mayer defended the losses by saying that Yahoo was a “far stronger, more modern company” than the one she joined three and a half years ago. As a result of her efforts, she said that in 2015, a third of Yahoo’s revenue was completely new revenue with over $1.6 billion attributable to mobile, video, native and social — or “MaVeNS,” in Yahoo parlance.
Going forward, Mayer said, the company hopes to save $400 million a year with the job cuts. Mayer further said that Yahoo will simplify its available ad products and focus on products that Mayer classified as strong; those are Search, Mail and Tumblr. Mayer said that part of this will include further integrating Polyvore, which it bought in July. The company predicted it will hit about $4.5 billion in revenues this year.
Mayer also fired back at what she characterized as upsettingly blatant “falsehoods in the press.” Specifically, she mentioned reports of $7 million spent on holiday parties, criticisms of Yahoo’s $450 million food program and reports of free cell phones for employees. “Both numbers are exaggerated by more than a factor of three,” she said. And in terms of the phones, she said, they remain the property of the company and are essential. “Mobile is a huge part of our strategy. We could not have built a billion-dollar mobile advertising business if the people building it did not use the tools, platforms and products we expect our users to use.”
Overall, Mayer emphasized that the turnaround of the business takes time. “As we implement these changes,” she said, “2016 will very much be a transition year with revenues and earnings expected to decline, returning to modest but accelerating growth in 2017 and 2018.”
Still, outspoken shareholders, like Eric Jackson of SpringOwl, were not totally satisfied. “It is clear that our voice on behalf of shareholders has been heard,” Jackson said. “But we believe the strategic plan does not fully address the core issues which have destroyed shareholder value. We are committed to continuing to push for moves that will fundamentally turn the company around and result in a higher stock price and value creation for all shareholders.”