Storm Gates Break at Yahoo

(MoneyWatch)  Yahoo Firing 1,500 Workers; 3Q Profit Falls 64 Percent- AP
"Mired in a deep slump, Yahoo Inc. will fire at least 1,500 workers to cope with a crumbling economy that dented its third-quarter profit and turned up the heat on the Internet company's management as investors stew over a missed opportunity to sell to Microsoft Corp. for $47.5 billion."
Yahoo's new round of job cuts represent over 10 percent of its workforce, and follow the 1,000+ layoffs announced just last January. During today's trading session, the company's stock was trading down near $12/share, in anticipation of the weak earnings report. (In after hours trading, investors drove the share price back to ~$13/share.)

Yahoo's troubles are in stark contrast to Google, which announced strong earnings recently. Google's stock has been rebounding somewhat lately, although as with virtually all companies, the situation remains volatile.

From a content perspective, Yahoo's been making lots of good moves -- from "Buzz," to "omg," to its front page "Top Ten Searches" feature (which competes with Google Trends), to expanding its advertising relationships with newspapers. But the core of its problem lies not in its content, which is terrific, or its traffic, which makes it the biggest website in the world, but with its ad serving technologies.

Yahoo simply cannot monetize its traffic or its partners' traffic at anywhere near the level that Google can. Some observers therefore feel that time for Yahoo is running out.

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The fortunes at Yahoo and Google affect everybody else in the online media industry in multiple ways. One that is obvious is how media sites utilize Yahoo's "Top Ten Searches" and Google Trends to identify current trends in the news, integrating keyword search phrases into their own content, where relevant, in the hope of driving more traffic to their sites via organic search.

Meanwhile, others are bidding on these same hot search keywords, but their price at auction rises rapidly, so the early bird gets the worm in SEM. But, whether it's SEM or SEO, content sites need to have an evolving strategy for leveraging the massive traffic flowing through Yahoo and Google's search engines.

This is just one of the reasons what happens at the search giants has direct impacts on the rest of us in media.