Yahoo! has revealed a 19% dip in quarterly profits, claiming America’s economic position is affecting online advertising.
The search engine admitted that the worsening economic condition has resulted in clients lowering expenditure on display advertising, especially in the finance sector.
Yahoo!, which has been in takeover talks for most of the year, also said that it has spent $22 million (£11 million) on lawyers to help fight off Microsoft’s offer.
Microsoft made an unsolicited $33 per share bid in May this year, which was rejected by Yahoo!’s board (see Microsoft Withdraws Yahoo! Bid).
Shares are now reported to be worth $21.40, according to unofficial trading reports, well below Microsoft’s last offer.
Yahoo!’s profits have fallen from $161 to $131, despite profits of $542 million (£272 million) recorded in the first quarter.
These figures come just a day after rebel shareholder Carl Icahn joins the Yahoo! board, following a deal as he agreed to drop his proxy battle to oust the online company’s existing board (see Icahn Joins Yahoo! Board).
Reports suggest the company will now be under pressure to up profits or sell assets, such as its Asian interests.
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