The confirmation from Yahoo! that it is cutting 1,000 jobs is a stark warning that current economic conditions are hitting even the most established internet companies this year. The firm announced a 23% fall in profits for the last quarter of 2007 year on year, and warned the markets not to expect much growth in ‘08.
Since emerging as one of the great pillars of the first generation of web brands, Yahoo! has been constantly chasing Google, both in terms of search traffic, and strategic acquisitions. At one time or another Yahoo! was reportedly looking to acquire Web 2.0 upstarts - Facebook, YouTube and MySpace, but failed on all three accounts, although it did pick up photo sharing site Flickr. Its attempts to go it alone in the social networking space have lacked mainstream penetration, while eBay’s dominance in online auctions forced the firm’s “Yahoo! Auctions” to close in the middle of last year.
The internet giants of old are among the most high profile new media brands currently suffering economically, with AOL leaking revenue and RealNetworks earning more slugging it out in court with Microsoft than it expects to make organically in 2007. On top of this, M&A activity is predicted to plateau this year, which all add up to a clear sign of tightening purse strings.
[...] The browser’s dominance With little room for customisation in early versions of Internet Explorer, portals like Yahoo! and Lycos vied for consumers’ attention and the coveted position of being your homepage. Toolbar plug-ins from the likes of Google provided easy access to popular functions like search and “autofill” for forms. As a natural progression, customisable homepages such as iGoogle and Netvibes have allowed web users to tailor content according to their interests and needs, cementing the position of the browser as the #1 application on the desktop. This developement allowed media and brands to gain a position on user’s hompages by developing gadgets such as Shiny Red client Yell’s iGoogle search box. [...]