The stock market’s tepid reaction to Yahoo Inc.’s move to shake up its management suggests the Internet company may need to take bolder steps, such as a major acquisition, to challenge industry leader Google Inc.
The goal? To shock Yahoo’s growth rate back to the heady levels that for years made the company a darling of Wall Street. In 2004, Yahoo revenues were $2.5 billion, a 76 percent jump from $1.4 billion the year before. In 2005, sales grew 43 percent to $3.6 billion, and they are expected to rise only 23 percent in 2006 to $4.5 billion. Yahoo’s forecast for next year is even more troublesome, with sales projected to increase only 18 percent to $5.3 billion.
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