Yahoo! has slashed its sales and profit forecasts for Q1 2001.

The company expects Yahoo.com ad sales to slump as other Web businesses fail to raise enough cash to advertise with it. Dotcoms bought a third of the ads on Yahoo.com last quarter.

Yahoo expects Q1 revenues of about $220 million to $240 million. This is less than the estimates from analysts polled by First call/Thomson Financial who had reckoned on sales of $303.6 million. For the year Yahoo has forecast revenues of $1.2-1.3 billion - the analysts had reckoned on $1.42 billion.

The company posted net income of $80.2 million, or 13 cents per share, on revenues of $310.8 million for Q4 2000. Profit was $5 million below Wall St expectations. But for Q1 2001, earnings per share are going to be down to 4-7 cents, compared with the 13 cents expected by the analysts. ®