2008 is going to be an extremely exciting year for Yahoo. With Jerry Yang back as CEO, massive layoffs coming up, the integration of Delicious into their search results and their traffic dipping below that of Google (see graph below) again for the first time since the end of 2006 a lot of people are wondering what 2008 will bring for Yahoo. Or they just wonder if their stock will ever recover again and are waiting anxiously for the earnings announcements on January 29 in little more than a week.
Alley Insider claims to have access to an insider at Yahoo who told them that if the stock price doesn’t rise above $20 per share before the 29th Yahoo will fire 1,500 to 2,500 employees. Earlier this week Techcrunch reported that about 250 employees at Yahoo had been asked to turn in their computers. Yahoo has more than 11,000 employees so firing a large percentage like this will sure have a huge effect on the company as a whole. That might be precisely the effect that Yang is after as he is perceived as too much of a nice guy to run such a mammoth of a company. Taking harsh decisions like this might signal a much needed change at Yahoo, or simply the signs of a death struggle and nothing more than an attempt to please shareholders.
Either way, Yahoo shall not go silently into the night or give up without a fight. And why should they? They still have a market cap of more than 27 billion and are the number 1 news source on the web, Flickr is catching up to Photobucket and Yahoo Mail (with more than 250 million users) is still THE number 1 webmail solution.
The first thing Yahoo should work on is its image. They appear to have lost everything to Google. Unless it can change this perception it might turn into reality. After all, perception IS reality.
Traffic results for Yahoo.com VS Google.com over the last three years:
Yahoo stock price over the last 3 months: