Wednesday, January 30, 2008

Yahoo to Cut 1000 employees; Yang is mum

Now Jerry Yang is trying to ramp up the spending at a time when everything else at the company is lagging.
He intends to spend an extra $300m this year to try to revive the
company, according to estimates by Mark Mahaney at Citi - but he has done
little to date to explain how the money will be spent.

If investors have lost patience, it is easy to see why. Former chief executive
Terry Semel asked for Wall Street's understanding three years ago as he set out
on Project Panama, an expensive fix for Yahoo's search advertising system that
was meant to close the gap with
Google.

There are still rumors that MSFT might buy them out. If I were MSFT I would build up Live and wait to see if this turnaround effort bears any fruit. I have a feeling it might be a dismal failure. This is a climate where the price of search advertising has been dropping like a stone and people are going to social networks instead of to the internet portals.

I think Yahoo needs an injection of Web 2.0 ASAP. Maybe Yahoo should float an acquisition of Facebook or something. A bold move like that could really get their stock price back up and pull them into the Web 2.0 world. Also they *really* need to cut back on the stock photos on their pages. It looks pretty bush league for a company that has a 25 billion market cap. In the meantime the stock will languish as Google keeps eating their lunch.

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