SAN JOSE — Tim Koogle is stepping down as chief executive of struggling Internet bellweather Yahoo! Inc., though he will stay on as chairman.
The company also announced Wednesday that its first-quarter operating earnings will come in at “approximately break-even,” well short of Wall Street’s expectations. Full-year results also could miss targets.
Koogle, who will remain CEO until a replacement is found, said he felt Yahoo needed an infusion of new talent.
The news came on the same day that trading in shares of Yahoo were halted because the company canceled an appearance at an Internet conference in New York.
Shares dropped $1.38 to $21 before trading was halted on the Nasdaq Stock Market. After Koogle’s plans were announced, shares fell another $2.75, or 13 percent, to $18.25.
Koogle, a former executive at Motorola Inc., became Yahoo chairman in 1999.
“This guy has a lot of background here, been there from very early on, and has done a real good job,” Finding a replacement will be difficult, like “getting someone to step in front of an avalanche,” said John Corcoran, an analyst with CIBC World Markets Corp.
After starting as a search engine in the mid-1990s, Santa Clara-based Yahoo grew into a full-service information and shopping portal and became the world’s most popular destination on the Internet. Yahoo also was one of the Internet’s biggest financial success stories, with revenue nearly doubling last year, to $1.1 billion, and profits of $291 million.
But the company’s dependence on advertising – which accounted for nearly 90 percent of last year’s revenue – has proven to be problematic in the dot-com meltdown and the overall slowing of the economy.
“It’s been a real tough quarter for Internet advertising,” said Abhishek Gami of William Blair & Co.