New Yahoo boss admits that things are bleak -

Yahoo's new CEO has just emerged from his office having seen all the books and realised what a poisoned chalice he has taken on.

Scott Thompson said that there was no question that Yahoo needed to do a lot better and he thinks that reviving the company's flagging display advertising business was the way forward.

This is stage one of a cunning plan which will involve something a little more bolder later on.

Thompson told Reuters that Yahoo needed to "get innovative products that matter into the market."

Wall Street appears to be willing to give the former PayPal president some breathing room to settle in and figure out a strategy.

The fact that he seems to be talking with a greater sense of urgency than his predecessors seems to indicate that he has got the hang of the sense of panic which should be required for his job.

However, other than that, Thompson, along with Chief Financial Officer Tim Morse, was cryptic about the progress of Yahoo's strategic review.

Thompson said that Yahoo would invest the majority of its resources into its core businesses, while remaining open to potential acquisitions and looking for "revenue streams that look different from what we're doing today."

The outfit said that its net revenue in the first quarter would range between $1.025 billion and $1.105 billion.

The company earned $296 million in net income in the three months ended December 31 compared with $312 million during the same time last year.