Yahoo will cut 15 percent of its workforce and aim to divest assets such as patents, real estate and Web properties as part of its latest strategic plan to turn the company around.
The company also took a $4.46 billion goodwill charge to write down the value of its Web properties and Tumblr, which was acquired in 2013 for $1.1 billion.
The news was far from unexpected and had leaked in numerous media reports. Yahoo stopped short of saying it would look to sell all of its Web business. However, Yahoo's plan to ditch non-strategic assets would make it more appealing as a takeover target.
On a conference call, CEO Marissa Mayer said:
Yahoo today is a far stronger more modern Company than the one I joined three and a half years ago. We've tripled our mobile audience to more than 600 million monthly users, improved many partnerships, streamlined our data centers, hired incredible technical talent and invested wisely to meet future needs. At the same time we shifted resources towards growth oriented businesses and markets by closing 22 offices and sunsetting more than 120 products and features. As a result in 2015 alone, about a third of our revenue was completely new revenue with over $1.6 billion attributable to Mavens, mobile, video native and social.
Among the key points:
Should those moves play out as expected, Yahoo would make a better takeover target. Yahoo's strategic plan is akin to fixing up a house before trying to sell it.
Yahoo properties were No. 3 in terms of unique users in December, according to comScore. Verizon, which owns AOL in No. 6 place, is reportedly also interested in Yahoo.
Yahoo reported a fourth quarter net loss of $4.43 billion, or $4.70 a share, on revenue of $1 billion excluding traffic acquisition costs. Yahoo's loss included a goodwill impairment charge of $4.46 billion. Non-GAAP earnings were 13 cents a share.
Wall Street was looking for earnings of 13 cents a share on revenue of $1.18 billion.
Regarding the goodwill charge, Yahoo said it "concluded that the carrying value of our U.S. & Canada, Europe, Latin America and Tumblr reporting units exceeded their respective estimated fair values."
For 2015, Yahoo reported a net loss of $4.36 billion on revenue of $4.09 billion excluding traffic acquisition costs.