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Could more layoffs be in store for Yahoo?

It's no secret that Yahoo is in trouble.  With shares falling to a five-year low, and no word yet on whether the new Google advertising pact will withstand regulation scrutiny, Yahoo is surveying its limited options.

Earlier this year, Yahoo cut 1,000 jobs, or roughly 7 percent of its workforce.  Analysts are calling for Yahoo to cut deeper into its company to try to regain competitiveness.  Analyst Henry Blodget suggested Yahoo fire 3,018 employees, more than 20 percent of its current workforce.

While Yahoo is unlikely to fire this many employees, sources close to Yahoo say cuts are coming.  According to a Silicon Alley Insider report, sources state that Yahoo is mulling over a new round of job cuts.  The cuts would be less than 20 percent, but significant.  The site describes, "While our Henry Blodget has called on Yahoo to can 3,018 people (that's more than 20 percent of the workforce), the odds that Yahoo will make cuts on that scale are very low, we're told by people familiar with the company's thinking. But we're also told that another round of layoffs are indeed on the drawing board, prompted by a grim financial forecast."

The cuts may be announced after the third quarter results are predicted October 21.  The report is expected to be mixed at best, and may further damage Yahoo's already unstable stock value.

Also bad news for Yahoo is that Sen. Herb Kohl, chairman of the congressional subcommittee on antitrust, competition policy and consumer rights, is pushing the U.S. Department of Justice to examine the Google-Yahoo partnership closely for possible antitrust violations.  He sent the DOJ's head a letter Thursday with this request.  If the DOJ were to rule that Yahoo could not continue in the pact, it would be devastating, as the deal is really one of the only pieces of good news for the company lately.

Kohl's antitrust committee held its own review of the merger.  While its findings were inconclusive, the committee frowned on the deal.  In Sen. Kohl's letter he states:

The parties assert the transaction is in the advertisers' best interests since it will create a more efficient marketplace.

While we have conducted a careful review of this transaction, we do not have the benefit of the confidential business information supplied by the companies to the Department nor the economic models necessary to predict consumer behavior...nonetheless, we conclude that important competition issues are raised by this transaction. Should the amount of advertising outsourced by Yahoo to Google grow significantly, we believe the threat to competition will also increase.

The partnership is currently in its final stage of approval by the U.S. Department of Justice.  The DOJ may block the deal entirely, or it could only allow it to proceed with strict conditions -- so called "remedies".



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RE: proof
By someguy123 on 10/4/2008 12:11:24 AM , Rating: 1
I agree with most of that except education and healthcare. I mean, people need some sort of education to succeed and public schools' fulfillment of that is pretty basic. and about healthcare, you really can't completely control outside anomalies from hurting you in some way, and with the way healthcare is priced right now in the U.S. you'd have to be already successful to be able to afford it.


RE: proof
By straycat74 on 10/4/2008 8:48:43 AM , Rating: 3
The department of education is useless. The money could be better spent returned to the taxpayers. Education can and should be funded by the state and local governments, not making a bloated bureaucracy.

As for healthcare, government should stay out. I had to shop for a policy and purchased one last month. I didn't hear about it on the news I actually did it. You can not get a deal on insurance any where because the price is regulated by government. That means no competition. And it doesn't break the bank, you have to budget for it, and buy the right coverage. I could pay $1200 a month, and not have to pay a dime extra for medical attention, but I don't plan on going to the doctor every week. So in the event I do go, I pay more.

Healthcare, like your investments take a little bit of thought and effort to do well. I am disturbed by the way Americans are starting to think. Everything we need should be provided for us? Food. Done. Shelter. Done. Financial security, (bail out) done. I guess you people are right, I should work, pay taxes, and the government will provide. I can put up a huge portrait of the current President in my living room, and be thankful to the allowance given to me by my government, because all my needs are taken care of. We can them all change our sur-names to Eloi, and be done with it.
I guess it makes sense with more and more "children" living at home into their 30's and 40's.


RE: proof
By someguy123 on 10/4/2008 1:10:02 PM , Rating: 2
If you actually read what I posted you'd see that I agreed with the fact that the government is becoming too socialized, and I only disagreed with those two areas.
Also, where did I say that education must stay regulated by the department of education? All I said was that basic education is fundamental in success. Education funded by state/local governments is still socialized education in that region is it not?

And with healthcare, the government's regulations are pretty much based on what lobbying pharmaceuticals and HMO's wanted. The current regulations are meant to benefit the corporations. I think the difference in opinion is that you see heath care as a business, while I see it as a right. I don't want EVERYTHING to become socialized, and I'm not looking for a hand out. I am very financially secure and to be honest the pricing does not effect me, but I still believe this should become socialized.


"You can bet that Sony built a long-term business plan about being successful in Japan and that business plan is crumbling." -- Peter Moore, 24 hours before his Microsoft resignation

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