Yahoo hires McKinsey to help make major decisions
10 November 2015
Sunnyvale-based Yahoo looks set for extensive reorganisation after the internet portal hired McKinsey consultancy to help with strategic decisions on which units to close, sell, or invest in, Recode reported.
The effort would call for corporate reorganisation of the company, which CEO Marissa Mayer had been looking to turn around for the last three years.
Yahoo shares were down 33 per cent in 2015.
In the 12 months that ended in September, Yahoo earned $242.3 million on revenue of $4.95 billion.
The development did not come as a surprise to analysts and according to one Citi analyst, "This is consistent with management's comments on the third quarter earnings call when they said that they would narrow their strategy and focus on fewer products."
"This would not be the first initiative to streamline parts of Yahoo" under Mayer's regime, he added.
Yahoo had struggled to boost revenue from ad sales in even as it faced stiff competition from Google and Facebook. Chief executive Marissa Mayer, Yahoo had been looking to revive its core media and online advertising business by spending more to get users on its websites, with little to report for the efforts.
After deducting fees paid to partner websites, Yahoo's revenue was down to $1.0 billion in the third quarter from $1.09 billion a year earlier.
According to the company's projections revenue was expected to decline to $920 million-$960 million in the current quarter. Mayer had asked top executives at the company in the last month to make three to five-year commitments to the company, Re/code reported citing sources.
A number of top executives including media head, Kathy Savitt and chief development officer Jackie Reses, had left in the last couple of months.
According to Re/code, which cited Yahoo insiders at least two people reporting directly to Mayer could leave the company.