Wall Street is losing patience with internet firm Yahoo which saw its shares plummet to a four-year low yesterday after warning that restructuring to revive its fortunes could take another year.
Yahoo's final-quarter profits fell by 24% to $205m (£103m) as web users flocked to rival sites such as Google, Facebook and MySpace.
The Silicon Valley company announced that it will cut 1,000 jobs, 7% of its workforce, in its biggest downsizing since the collapse of the dotcom boom at the beginning of the decade.
Yahoo's chief executive, Jerry Yang, admitted that the firm faces "headwinds" this year, although he predicted that it would return to higher levels of cashflow in 2009. His remarks dismayed analysts who pointed out that Yahoo's earnings have fallen for eight successive quarters.
"Basically what Yahoo is saying is 'have more patience with us' when investors have already given them two-and-a- half years to transform their business," said Sandeep Aggarwal, an analyst at Oppenheimer & Co.
Anthony Valencia, a media analyst at TCW Group, told the Los Angeles Times: "We're just starting 2008 and already it is becoming a 2009 story. It's beginning to seem like it's always a 'next year' story."
Once dominant in internet searches, Yahoo's share in the US market has dwindled to 23% compared with Google's 58%. In Britain, the research firm Comscore still rates Yahoo as the fourth most popular website with 21.2 million monthly visitors - although its numbers have been slipping.
Yahoo overhauled its management in June with the departure of long serving chief executive Terry Semel. The new leadership promised a recovery plan within 100 days but critics complain that a coherent strategy is yet to emerge.
At the Consumer Electronics Show in Las Vegas this month, Yahoo revealed new mobile phone offerings including technology for improved home pages on handsets and software to help outside developers build new applications. Under-used functions such as an auction site, a podcast offering and a social networking venture have been dropped.
Some industry watchers are calling for radical changes - Citigroup analyst Mark Mahaney urged the firm to give up on internet searches by outsourcing the function to Google. He cut the stock from "buy" to "hold" yesterday and said the possibility of a takeover was among the few remaining factors in its favour.
Yang, a college dropout who co-founded Yahoo in 1995, urged investors to give the company time.
"We are not tinkering around the edges," he said. "We are making significant, and what we believe are game-changing, investments in Yahoo's future."