San Francisco — Internet bellwether Yahoo Inc. became the latest victim of the technology meltdown Wednesday, announcing that it would seek a new chief executive and warned that the company may only break even this year.
Yahoo said it would break even in its first quarter as revenues would reach $170 million to $180 million down sharply from previous estimates of $220 million to $240 million. Analysts had expected Yahoo's first quarter earnings to be 4 cents to 8 cents a share.
Perhaps more disturbing to investors, the company said that full-year 2001 earnings could drop to zero. A consensus of analysts recorded by First Call/Thomson Financial previously estimated Yahoo's full-year profit would be 36 cents a share.
"The patient's pulse is barely beating right now," said Derek Brown, an analyst with WR Hambrecht. "If they are talking about break even as a possibility (for 2001), that's a dramatic decline shocking is one of the words that would come to mind."
The announcements, after the market closed, capped a day of nervous speculation.
First, Yahoo's chief financial officer canceled a speech to market analysts. Then NASDAQ halted trading in the company's stock. The Santa Clara, Calif., company's shares had fallen $1.44 to close at $20.94, a new 52-week low, before the halt.
After the company's announcement, Yahoo's stock plunged to $17.88 in after-hours trading.
Tim Koogle will step aside as Yahoo's CEO, though he will keep his job as chairman. Koogle will stay on as CEO until a new chief is selected.
Fnding a replacement will be like "getting someone to step in front of an avalanche," said John Corcoran, CIBC World Markets Corp analyst.
Yahoo, one of the Web's most popular sites, has lost about 90 percent of its market value in the last year. Yahoo hit a 52-week high of $205.63 last March.
The Internet pioneer's revenue model based primarily on advertising has come under increasing pressure as the ad market has declined in a weakening overall economy. Last year about half of Yahoo's advertising came from other dot-com companies.
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