Yang: No more denial at Yahoo

Jerry Yang struck a humble tone Tuesday in his first report to investors as Yahoo's new CEO, turning a routine earnings call into an unusual corporate confession.

"I'm very well aware of the challenges we face," Yang said, as Yahoo's financial performance disappointed investors for the sixth quarter in a row. "There's a significant gap between where Yahoo is and where it needs to be."

Yahoo's profit for the quarter ended June 30 was $161 million, or 11 cents per share, 2 percent less than it was a year ago. Revenue was $1.70 billion, up only 7 percent, despite the rapid expansion of online advertising.

Yahoo also said performance for the rest of the year would be poorer than previously expected, prompting some investors to immediately begin selling the stock. Yahoo closed Tuesday at $27.53, up 3 three percent on hopes that its woes were behind it. The stock promptly fell more than 4 percent as soon as the quarterly report was released after trading closed.

Since early 2006, the value of Yahoo's stock has plummeted more than 35 percent. Yang replaced Terry Semel as chief executive last month.

During the call, Yahoo President Susan Decker introduced a laundry list of mistakes by saying: "Let's begin with the areas where I think we could have done a better job." Decker went on to acknowledge everything from failures to make timely investments in Yahoo's technology platform to a reluctance to make tough personnel

The candor was in marked contrast to traditional earnings calls, where executives strive to make their companies look as good as possible. Afterward, some analysts joked that Yahoo had entered a 12-step program.

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