It's partly the Facebook effect. According to ad market analyst eMarketer, Yahoo’s display advertising share fell last year to 16.2% of display revenues, down from 16.5% in 2009; whereas Facebook accounted for 13.6%, up from 7.3% in 2009.
Yahoo’s news comes just weeks after it announced 4% cuts, where it laid off entire divisions and added others like bookmarking service Delicious to the ominous ‘sunset’ list. Which, let's face it, is never a good sign. Especially when compared to what’s going on over at the Googleplex. Facebook may have overtaken Google to become the web’s most visited site, but reports of the latter’s demise are greatly exaggerated. In the same quarter, the search giant's revenue grew 26% to $8.4bn, and its profits were up 29% to $2.5bn.
It’s also hiring 1,000 people in Europe over the coming year – an impressive increase of 20% of its current EMEA staffing. At least the 1,410 laid off by Yahoo know where to send their applications. Meanwhile outgoing CEO Eric Schmidt is going to be able to take his $100m stock pay-out and head upstairs (to the chairmanship) safe in the knowledge that the quest for world domination he helped initiate hasn’t exactly fallen flat.
But while Google is able to keep pace with the Facebooks of this world, you can’t help suspecting Yahoo is going the way of the MySpaces, which is also shedding jobs at the rate that Facebook is gaining friends. Yahoo’s chief financial officer Tim Morse insisted that ‘we are a premier digital media company increasingly focused on our mission’ of providing compelling content. But does that mean anything to the average online user these days?