Bartz puts positive spin on Yahoo! job cuts

Wednesday 22 April 2009 | By Heidi Scott, Gosh! Media Copywriter

New CEO of Yahoo!, Carol Bartz, put an optimistic shine on the company's dismal first quarter results at a recent press conference. Profits tumbled by 13 per cent from $1.352 billion to $1.156 billion and net income fell by a whopping 78 per cent from 2008 levels. Plus Yahoo! announced that it will make five per cent of its worldwide workforce – some 675 employees – redundant.

This blow for Yahoo! comes just as the company was buoyed by the news that talks with Microsoft had be reignited. However, Bartz argued that the job cuts were intended to enable new hiring and investments in the company's bigger Internet properties. "We have good engineers but have to hire more and get them focused on the right stuff. It's probably the most important thing Yahoo!'s going to do to really become a big strong growing international company," she said.

Bartz outlined plans to bring together Yahoo!'s major properties to create a unified global platform, rather than its current scattered approach, which she claimed had prevented Yahoo! from adapting quickly and adding new features, especially outside of the US.

Carol Bartz, CEO of Yahoo!

In her speech to journalists, she mostly reined in her famously colourful vocabulary, although – near the end of the press call – she let slip, saying, "There were [Yahoo!] engineers in almost every country and way too many product people. We had one product management person for every three engineers. We had a lot of people running around but nobody f***ing doing anything!"

Despite the swift series of reshuffles that Bartz has introduced at Yahoo!, it may be a while before the company sees a return on its investments as it battles in the shadow of world leader Google. Bartz agreed that the programme will take time but said, "All that investment will pay off, I believe, with more innovation, faster and better user engagement, and the stuff we need to be a hot site. If we're a hot site, the advertisers will follow."

Projects such as the Yahoo Open Strategy have been more than a year in the making and are arriving slowly. Meanwhile, Google continues its brash 'launch early, launch often' philosophy, expanding into many new areas including telephone services, web browsers, mobile phone operating systems and general-purpose cloud computing infrastructure.

Revenue per search had dropped with the economy, argued Bartz. "It's like on-line window shopping. People are grazing around, they're just not clicking through to buy," she said. She argued that on-line search remained key to Yahoo's future, though she declined to say whether the company needed to be a primary player or whether it could work by scraping search results. Microsoft and Yahoo held many discussions last year concerning a partnership and the talks are back on again, according to All Things Digital and the Wall Street Journal.

Bartz was cagey, though: "I'm well versed enough in the search business at Yahoo to say it's absolutely critical to Yahoo. It's critical to our customers and partners that they have a combined search and display experience on the Internet. I haven't changed my position on that. Relative to anything else with Microsoft, I'm not going to comment," she said. Bartz did mention one hybrid project – Yahoo!'s plan to bring branded display ads into its search results, which currently feature only text ads. However, she seems to retain her belief in traditional display ads, adding "Pulling back on brand advertising is a short-term solution that leads to long-term brand erosion."

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