Yahoo CEO Jerry Yang hasn't been forced to step down yet, but as Yahoo continues to flounder, he's being forced to make some bold changes in the coming year.  (Source: Thomas Brown - Bloomberg News)
Making choice cuts, Yahoo struggles to stay afloat amidst plummeting profits

Yahoo, despite owning the most visited set of properties on the Internet, has been forced to make  big changes to deal with losing ground to its hungry competitors like Google.  Yesterday, Yahoo CEO Jerry Yang confirmed fears with an announcement that profit had significantly dipped from the previous year.

Yahoo experienced profit dips for several quarters, and now has another to add to the list.  The fourth quarter saw profit fall to $206 million USD, down from $269 million USD from the previous year, a drop of approximately 23.5%.  This comes despite revenue increasing $113 million USD to a total of $1.83 billion USD.

Profit for the year sunk to $660 million USD, from $751 million USD only a year ago.  Revenue increased over the year, but could not help the sinking profit margin.

The end result is that Yahoo will lay off approximately 7% of its workforce, trimming 1,000 of its 14,300 jobs.

CEO Jerry Yang says the company is facing strong "headwinds" and said, "This is a pivotal time for Yahoo's business and we have a unique window of opportunity right now to make the necessary, game-changing investments."

Analysts state that Yahoo may be in for even harder times if it loses its broadband provider deals with some of the major telecoms, including AT&T.  Many analysts have speculated that AT&T may drop Yahoo entirely.

Furthermore, Yahoo's heavy investments in online advertising may lead to further woes if advertising takes a hit due to the jittery, downward-leaning economy.

"I modded down, down, down, and the flames went higher." -- Sven Olsen
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