More Financial Woes for Yahoo

By Tracey E. Schelmetic December 17, 2010

Well, the rumors turned out to be true. Yahoo is this week embarking on the layoff of about 600 employees, most of them in the company's troubled Products division, translating to about four percent of its entire staff.

“This was a tough call, but a necessary one,” wrote Carol Bartz, CEO of Yahoo, in a company-wide employee memo. “We need to make these changes now to ensure that Products [division] is structured and running the way we want as 2011 begins. And that means we need fewer Yahoos in some areas, and different types of Yahoos in others.”

Now comes the news that Yahoo may begin trimming some of its online services and features.

The content-sharing site, Delicious, may not be on Yahoo Inc.'s shrinking menu of online services much longer, according to the Associated Press.

Delicious, apparently, is on a list of services that Yahoo is planning to close. An internal Yahoo document containing the so-called “endangered list” was posted on the Internet yesterday. The presentation was shared through Twitter, whose popularity may be one of the reasons that Yahoo no longer prizes Delicious as much as it did five years ago when it bought the site for an undisclosed sum.

In a statement, Yahoo confirmed it will phase out several services in the coming months without specifically mentioning Delicious. The company, based in Sunnyvale, Calif., said it would provide more details “when appropriate.”

Other services on Yahoo's hit list include MyBlogLog, Yahoo Buzz, Yahoo Picks and Yahoo Bookmarks.

Both the layoffs and the cut in services appear to be part of a “housecleaning” project that company CEO Bartz began after she was hired two years ago. She has closed or sold a variety of unprofitable or little-used services so Yahoo could focus on other areas more likely to attract traffic and sell advertising. Some of the priorities heading into 2011 include mobile, communications and local services, said the AP. Thus far, however, Bratz's strategy has done little to stem Yahoo's financial troubles or bolster its stock price.

Yahoo bought content-sharing site Delicious at a time when its then-CEO, Terry Semel, was trying to build a social hub. He later infamously tried to buy Facebook for $1 billion, only to be turned down by that social network's founder, Mark Zuckerberg. Delicious founder, Joshua Schacther, now says he regrets selling the company to Yahoo.

Tracey Schelmetic is a contributing editor for TechZone360. To read more of Tracey's articles, please visit her columnist page.

Edited by Jaclyn Allard

TechZone360 Contributor

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