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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 BansheeX on 10/4/2008 3:10:04 PM , Rating: 2
Something you are failing to explain is that religion doesn't need government or change with government to be practiced. Separation of church of state is an ideology by which belief systems of any kind are not endorsed by government. It has nothing to do with practice.

Economic systems require government in some form to be practiced. Economic systems have been confounded by creating categories that make people believe they are absolute models. They're not, capitalism and socialism are merely referencing the percentage of capital which is controlled privately and governmentally respectively. History would suggest that a system which is only socialist to the extent that government appropriates funds to protect rights, provide courts, and perform basic functions like laying pavement and picking up garbage is the optimal system. Systems like this are difficult to maintain, because government is usually able to deceive its ignorant populace into passing socialist enablements that grow as the problems they create beget more socialist solutions.

For example, at the turn of the 20th century, banks were allowed to do something no other industry could. Money started as gold, notes were supposed to be representative of actual gold deposits. The banks realized that redemptions at any one time never reached more than a fraction of deposits, so they created fraudulent notes not representative of real gold and loaned it out at interest. But it didn't always work, causing a lot of bank runs in the old days. Instead of banning this practice, they backstopped it with a central bank, but the central bank price fixed interest rates, causing a crash in 29. Government intervened further and turned it into a fifteen year depression, a nuclear explosion compared to the firecrackers of the original problem. Then the FDIC was created. It got depositors back in, but also removed the self-regulating fear and disincentive that would otherwise exist to prevent people from depositing their money with risky investment banks offering abnormally high yields. See how the failure to correctly solve one problem has led to a cascade of "solutions" that fundamentally pervert the risk/reward of the system until eventual collapse? Every attempt to "regulate" what was inherently fraudulent failed because it removed fears that otherwise would have existed to deter excessive risk.


RE: proof
By foolsgambit11 on 10/5/2008 6:24:45 PM , Rating: 2
quote:
Economic systems require government in some form to be practiced.
Not really. Anarcho-Capitalism requires no government intervention. That is to say, without any government, the 'state of nature' economy would reign. But I get your point, since it would seem (to me, at least) only one economy is possible without government intervention (unless you buy into certain stateless political systems, like anarchism).

quote:
History would suggest that a system which is only socialist to the extent that government appropriates funds to protect rights, provide courts, and perform basic functions like laying pavement and picking up garbage is the optimal system.
And you're basing this on a statistically significant number of cases? First off, historical accounts can only get us so far, because the size and speed of the modern economic system negate certain problems that existed in the past, and introduce certain other problems that didn't exist. But the fundamental principle is that globalization changes the game. On the other side of the argument, why would you say the government has a role in laying pavement and picking up garbage? Waste Management makes a successful business of garbage pickup (currently by contracting with local government, but they could potentially contract directly with people). All roads could be toll roads - wouldn't it be more equitable, since those who use the roads would be the ones paying for it?

But back to my basic point. The suggestions of history are anything but clear when it comes to varying degrees of Capitalism-Socialism. If we look at economies all over the world right now, the one clear conclusion we can draw is that America is an economic powerhouse. But to decide that's a direct result of the current low regulation of the economy is difficult to justify. There are numerous historical, cultural, and geologic factors which are key to America's position in the world.

In America, we've had two major 'laissez faire' periods - the early Twentieth Century and the late Twentieth Century. The first ended after causing the Great Depression, with the increased regulation of the New Deal era. The second may be coming to an end now (or not) thanks to concerns over another major economic meltdown.

This isn't to say that socialism is better, or that capitalism is. Just that there isn't decisive evidence for either. For instance, currently Europe may be experiencing slow growth, but China has been experiencing explosive growth, both nominally Socialist. The one good rule that applies when all else fails is, 'if it ain't broke, don't fix it'. So, while the economy is growing, we 'don't switch horses in midstream' (to pile on the truisms). But conversely, when something does break, you fix it. But in fixing it, you 'don't throw the baby out with the bathwater'. Put the smallest patch on the problem possible. That's how our current regulatory framework has evolved - the one that's at least part of why America is the most powerful country on the planet.

To draw on history from the other side, fundamental economic change has been advocated by various people on various occasions, and all have been soundly trounced. Communism? Anarchism? As politico-economic theories go, they've got about as much going for them as feudalism. I think most people can agree that 'perfecting' economics now comes down to incremental change. That is, at least for modern America, the best system lies somewhere in between European capitalism and complete free-market capitalism.

Why?

The question comes down to what your primary goal is going to be. To say it's maximizing quality of life (QoL) could be accurate, but it glosses over a lot of values questions. Is freedom important in QoL? To what degree? What about economic growth? What about security? Physical security? Job security? Economic security? Health security?

So even if the point were conceded that a system that was only socialist to the extent you outline is the most efficient, there's still a lot more to discuss. In addition to efficiency, what other goals should society have? What costs are acceptable in the pursuit of those goals (both economic and intangible costs, like restrictions on liberty)? For instance, would you consider there is at least a limited role for government in consumer protection - any or all of setting safety standards for baby cribs, cars, baby milk, Mexican jalapenos, drugs, &c...? Those are socialist incursions into the market, certainly. I mean, the free market would purge companies from business that people didn't trust. But we've chosen regulation as a preventative measure.

Anyway, I've rambled, and thrown out a lot of thoughts I have on the subject. Since nobody is going to come back and read this, I'm guessing I've probably wasted my time.


"It's okay. The scenarios aren't that clear. But it's good looking. [Steve Jobs] does good design, and [the iPad] is absolutely a good example of that." -- Bill Gates on the Apple iPad

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