Financial projections given to potential buyers of Yahoo, Inc. show that the company is in serious free-fall, according to a report Wednesday.

A copy of what is known as the “sales book” was seen by Kara Swisher at Re/Code and is said to show that Yahoo expects its revenue to drop by 15 percent for the full year 2016, while earnings are expected to decline by 20 percent in the same period.

In raw numbers, revenue excluding traffic acquisition costs was expected to decline from $4.4 billion in 2014 and $4.1 billion in 2015 to $3.5 billion in 2016, while earnings before depreciation, taxes and amortization dropping to $750 million in 2016 from $1.4 billion in 2014 and nearly $1 billion in 2015.

It gets worse, as The New York Times quotes an unnamed source saying that revenue is projected as coming in at cost with Yahoo expecting to pay other sites around $1 billion in 2016 for sending traffic to its advertising services.

Things don’t improve in the following year, with Yahoo saying it would lose an additional $120 million in fees from Yahoo Japan in 2017 due to the site now using Google search.

Dead man walking

The revelation that Yahoo’s financials are tanking doesn’t come as a big surprise as it follows news in February, again from a leak, that Yahoo’s main properties are rapidly losing traffic as well, with daily active users going to Yahoo’s home page falling 16.5 percent in December compared to December 2014, while traffic to Yahoo Mail dropped 11.5 percent and Yahoo Search dropped 8.8 percent over the same time period.

While Tumblr and Yahoo Weather were noted as doing well, the weather service is primarily app-based, while Tumblr itself notoriously doesn’t make any money, with a report in March noting that Yahoo was only able to sell 10 to 15 percent of inventory and was in discussions with Facebook to find ways to improve sales.

It really is a case of dead man walking now, given Yahoo’s numbers are falling off a cliff.

That said, a potential acquirer could still turn the business around by cutting the deadwood and focusing on the parts that make money, and sadly the only part that makes money is the advertising business versus many of Yahoo’s own properties.

If you were placing a bet, the smart money on who could buy Yahoo and turn it around remains Verizon with AOL’s Tim Armstrong taking the helm.

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