Unfortunately for Yahoo they are not performing nearly as well as Google this year with a 64% decline in net income. During the third quarter financial report call  Yahoo also announced they will be cutting their employee numbers by 10 percent. The economic climate was mentioned in the announcement which appears to be more of an excuse than anything as search advertising is regarded as one of the last sectors to cut when it comes advertising.

Yahoo stocks are also at a 52 week low.

Yahoo! Reports Third Quarter 2008 Financial Results

• Revenues - $1,786 Million
• Operating Income - $70 Million
• Operating Income Before Depreciation, Amortization, and Stock-Based
• Compensation Expense - $410 Million

Third Quarter 2008 Financial Results

• Revenues were $1,786 million for the third quarter of 2008, a 1 percent increase compared to $1,768 million for the same period of 2007.
• Marketing services revenues were $1,563 million for the third quarter of 2008, a 1 percent increase compared to $1,544 million for the same period of 2007.
• Marketing services revenues from Owned and Operated sites were $1,002 million for the third quarter of 2008, a 9 percent increase compared to $923 million for the same period of 2007.
• Marketing services revenues from Affiliate sites were $561 million for the third quarter of 2008, a 10 percent decrease compared to $621 million for the same period of 2007.
• Fees revenues were $224 million for the third quarter of 2008, compared to $224 million for the same period of 2007.
• Revenues excluding traffic acquisition costs (“TAC”) were $1,325 million for the third quarter of 2008, a 3 percent increase compared to $1,283 million for the same period of 2007.
• Operating income for the third quarter of 2008 was $70 million, a 53 percent decrease compared to $150 million for the same period of 2007.
• Operating income for the third quarter of 2008 includes incremental costs of $37 million incurred for outside advisors related to Microsoft’s proposals to acquire all or a part of the Company, other strategic alternatives, including the Google agreement, the proxy contest, and related litigation defense (collectively, the “strategic alternatives and related matters”).
• Operating income before depreciation, amortization, and stock-based compensation expense for the third quarter of 2008 was $410 million, a 12 percent decrease compared to $466 million for the same period of 2007.
• Operating income before depreciation, amortization, and stock-based compensation expense for the third quarter of 2008 includes the incremental costs related to the strategic alternatives and related matters noted above.
• Cash flow from operating activities for the third quarter of 2008 was $347 million, a 24 percent decrease compared to $457 million for the same period of 2007.
• Free cash flow for the third quarter of 2008 was $215 million, a 31 percent decrease compared to $310 million for the same period of 2007.
• Net income for the third quarter of 2008 was $54 million or $0.04 per diluted share compared to $151 million or $0.11 per diluted share for the same period of 2007.
• Non-GAAP net income for the third quarter of 2008 was $123 million or $0.09 per diluted share compared to non-GAAP net income of $153 million or $0.11 per diluted share for the same period of 2007.