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Yahoo Plans Job Cuts, Budget Tightening, Report Says

Yahoo has long been a distant No. 2 in search, with Microsoft consistently in third place.
In a move that may affect hundreds of its employees, Yahoo is reportedly planning to cut jobs in some areas in order to tighten its budget and focus on specific activities.

The number of potential layoffs is unknown, but the Internet company is expected to provide details when it releases its fourth quarter results Jan. 29, The Wall Street Journal reported Tuesday, quoting unidentified sources.

According to the newspaper, Yahoo's staff at the end of this year would remain about the same as the end of 2007, but workers would be added to areas company executives deemed as priorities. Yahoo has 14,000 employees.

Yahoo would not discuss job cuts, but confirmed plans "to invest in some areas, reduce emphasis in others, and eliminate some areas of the business that don't support the company's priorities.

"Yahoo has embarked on a multi-year transformation that includes making tough decisions about the business to help the company grow," Yahoo spokeswoman Diana Wong said in an e-mail.

The Internet pioneer has yet to show any progress against rival Google, which continues to dominate search on the Web and related advertising. Yahoo has long been a distant No. 2 in search, with Microsoft consistently in third place. Many analysts expect Google to continue to dominate the market this year.

Yahoo, however, remains strong in terms of attracting visitors. The portal in December had the largest audience with 136,634 visitors, according to ComScore. Google was second with 132,954, and Microsoft sites third with 120,034.

Nevertheless, Yahoo continues to struggle in the lucrative market for search-related advertising. The company's catch-up mode with Google and anemic stock prices led to chief executive Terry Semel stepping down last June.

Company co-founder Jerry Yang was chosen as Semel's replacement. Yang at the time said he planned to "realize Yahoo's strategic vision by accelerating execution, further strengthening our leadership team, and fostering an even stronger culture of winning."

The company this month unveiled a major upgrade of its platform for mobile phones, which is the focus of search companies looking to expand their advertising reach. Yahoo Go 3.0, however, failed to place the company on par with Google in terms of services, experts said.