The leading Internet search engine Yahoo! Inc. announced Thursday the plan to cut 400 jobs as part of its realignment move to seek "sustainable and profitable growth".
The latest cut amounts to be 12 percent of Yahoo's 3,256 workforce. Yahoo president Jeffrey Mallett told an analyst meeting in Sunnyvale, California, that the company also plans to form more partnerships with providers of high-speed Web access.
He said Yahoo is reorganizing its international and broadcast divisions and will condense its business units from 44 to six so to reduce to reliance on advertising and generate more paid services.
"There's nothing wrong with advertising revenue," Yahoo's chairman and CEO Terry Semel said. "We believe in it. But you will see this is going to be a much more diversified company."
Semel, who replaced Tim Koogle in May, is trying to develop services that will make Yahoo less dependent on advertising after the company reported four straight quarters of losses. He noted that 90 percent of Yahoo's 2000 revenue came from advertising, which he expected to drop to 76 percent this year and about 50 percent by 2004.
The CEO said Yahoo hopes to forge alliances with Internet- access providers such as phone companies which will help Yahoo sell packages of services to customers.
Yahoo has 218 million registered users - 80 million of whom are considered active users. Semel said he wants to have "direct- billing relationships" with 10 million of Yahoo's active registered consumers.
On Wednesday, Yahoo and SBC Communications Inc. said they plan to sell fast Internet service with new features in the second biggest U.S. local-telephone company's 13-state region. Yahoo will provide content and get a share of subscription revenue.
Yahoo's broadcast business, which provides Internet access to events like investor conferences and roadshows for new stock sales, will focus on "packaged, proven solutions" rather than custom work, according to Mallett. Yahoo will hire 100 people to support new initiatives, resulting in a net loss of 300 jobs, he said.
Yahoo shares have lost three quarters of their value over the past year as advertisement sales declined. "We're moving out of the transition phase and getting our company back positioned for growth," Mallett said.