Profits Up; Jobs Down

By: Mike Campbell
Internet giant Yahoo! announced that its Q3 profits had trebled to $186 million, despite a 12% drop in its sales revenue which fell to $1.58bn. This miracle was achieved on the back of drastically reduced operating costs. The company had reduced its workforce by 2000 employees over the course of the last year.

Despite Yahoo!’s popularity, the company has failed to see the massive profits of search market leader Google. Yahoo! hopes to reverse this position by joining forces with software giant Microsoft. The deal would see the Yahoo! website using Microsoft’s search advertising and search technology (Microsoft recently re-launched its own search engine Bing which has been gaining popularity). In this deal which awaits regulatory approval, Yahoo! would be responsible for the banner advertising of both partners.

In the UK, the bank bonus row is set to move into a new chapter as a report predicts that bonuses for 2009 will rise by 50% - just a year after the public bailout of the banking sector. The Centre for Economics and Business Research report indicates that the bonuses will rise to £6bn on the back of increased profits and less competition – some financial institutions were allowed to go to the wall, of course! Again, the absolute level of the bonus is lower than in previous times. In 2007, the figure was £10.2bn, but these days, fewer people still have jobs in the City and the sector is still trying to shake off the hangover from the first part of 2009.

The Pound Sterling made modest gains against both the Euro and the US Dollar in yesterday’s currency trading session.