SAN FRANCISCO — After announcing a sharp drop in fourth-quarter profits Tuesday, Yahoo issued a disappointing outlook for this year, suggesting that investors would have to wait until 2009 for a turnaround.
Yahoo also said that as part of its plan to revive its fortunes, it would cut 1,000 jobs by mid-February to reduce costs and narrow its focus to its most important businesses.
The company, however, said it planned to invest aggressively in some areas, like advertising technology and selected portions of its Internet portal, as it tries to capture a larger share of online ad dollars. Since some laid-off employees could apply for new jobs at Yahoo, the net effect on the work force, which recently grew to 14,300, was not clear.
Jerry Yang, the chief executive, warned investors of “head winds” this year. Yahoo’s projections for revenue growth and profitability in 2008 were either at the low end of analysts’ expectations or below them.
Yahoo executives said those projections were largely independent of the slowdown in the United States economy, noting that it was too early to predict whether weakness in the financial, travel and housing sectors would hurt online advertising.
“There is not a lot of positive about the outlook,” said John Aiken, an analyst with Majestic Research, an investment analysis firm in New York...