Yahoo! to shed 600 jobs

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Internet giant Yahoo! said it would cut some 600 jobs, about four percent of its global workforce, in the third wave of layoffs at the company since late 2008.

The company said the decision was part of an "ongoing strategy to best position Yahoo! for revenue growth and margin expansion and to support our strategy to deliver differentiated products to the marketplace."

A Yahoo! spokesperson said the "action impacts approximately four percent of our global employee base or 600 employees," adding that the company would "continue to hire on a global basis to support our key priorities."

The Sunnyvale, California-based Internet firm did not spell out where the job losses would come from.

But it is the third round of layoffs since the fall of 2008 and the second since Carol Bartz took over as chief executive in January 2009.

Bartz has been seeking to carve out an identity for Yahoo! as it struggles to compete with Google and Facebook.

"Whatever they do they'd better do it quick," said analyst Rob Enderle of Enderle Group in Silicon Valley, who insisted that layoffs were not the way to fix Yahoo!'s problems.

"They are running out of time and they are bleeding people -- and investors are losing confidence in them."

Yahoo! has been the subject of a series of takeover rumors with AOL and the private equity giant KKR cited as potential buyers.

"Right now, they really need to bring on board another CEO or sell the company to someone who really knows how to run it," Enderle said.

"They need to a way to find competent management or they are going to find their way out of business."

The analyst listed Microsoft, Google, Facebook and AOL as companies with the skills needed to resuscitate Yahoo!.

The selection of Bartz as chief executive was another wrong call by a Yahoo! board that rebuffed a bid by Microsoft to buy the company for about 45 billion dollars in early 2008, Enderle said.

"It is mistake after mistake," the analyst said. "If they are able to hang on to anybody that has any talent at this point, I'd be surprised."

The firm's net profit for the third-quarter of the year more than doubled but revenue was flat at the struggling Internet company and its forecast for the current quarter was disappointing.

Bartz billed the results as proof Yahoo! is on course to regain lost glory.

"We've made substantial progress this year toward executing our strategies for enhancing profitability and resuming revenue growth," Bartz said of the third-quarter financial results.

"Product rollouts are accelerating thanks to modernization of our underlying platforms; and we continue to implement our search alliance with Microsoft on schedule," she said.

Microsoft and Yahoo! reached an agreement last year which calls for the US software giant to power searches at all Yahoo! websites.

Yahoo! will continue, however, to present search results in its own fashion on its sites, with only a discreet reference at the bottom of the page to their being "Powered by Bing," Microsoft's new search engine.

Yahoo! has "disposed of non-core assets" while making strategic acquisitions and cultivating partnerships with hot young Internet stars Facebook, Twitter, and Zynga, according to Bartz.

In October, Yahoo! began rolling out changes to its Web search engine in what amounted to the first significant revamp since it partnered with Microsoft.

Yahoo! envisioned a future identity that included making its Web pages more personalized and social.

The company had the makings of a vibrant online community years ago, but stalled while relative newcomer Facebook became the leading destination for social networking.

"Social networking is very close to what Yahoo!'s roots were," Enderle said. "It is surprising they are not taking a hard look at what Facebook is doing and figuring out a way to do it better."

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