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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 foolsgambit11 on 10/5/2008 6:24:45 PM , Rating: 2
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).

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.


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.

“Then they pop up and say ‘Hello, surprise! Give us your money or we will shut you down!' Screw them. Seriously, screw them. You can quote me on that.” -- Newegg Chief Legal Officer Lee Cheng referencing patent trolls
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