Yahoo plans to refocus business

Another poor set of financial results for the search engine giant

Yahoo profits have fallen again

Yahoo’s new chief executive Jerry Yang has promised to refocus its business after the internet search giant reported a sixth consecutive fall in quarterly profits.

Sales for the second quarter rose eight per cent to $1.7bn (£829m), but profits fell from $164m (£80m) to $161m (£76.8m).

Yahoo blames weak display advertising revenue for the results and has also cut its full-year income forecasts by up to $200m (£97.5m).

Yang says he will map out a strategic plan to help the struggling company to compete with chief rival Google.

‘By sharpening our focus, speeding execution, building our technology and talent and investing in key growth areas, we can put Yahoo on a clear path to fulfil its potential as an internet leader,’ he said.

Yang predicted poor second-quarter results when he took over from previous chief executive Terry Semel, who resigned last month.

The value of Yahoo’s shares has fallen by about 30 per cent since the beginning of 2006, in stark contrast to Google, which increased fourth quarter sales to over $1bn.

Yahoo will collect just 16 per cent of US online ad revenue this year, while Google is expected to increase its share from 24 per cent last year to 27 per cent.

Since taking over, Yang has announced the acquisition of a sports web site and said the firm will overhaul the way it sells advertising in the US.