On the same day as it announced the acquisition of online video firm Maven, Yahoo has cut their workforce by seven percent in an effort to revive its finances.
The day after it formally rejected a $44.6 billion bid from Microsoft, Yahoo unveiled the cuts, which according to company spokesperson Diana Wong, affect areas ‘that don't support [Yahoo’s] critical growth initiatives."
One of these initiatives is thought to focus on web video, hence the purchase of Mavern. According to eMarketer, an online advertising research company, US online video ad spending will grow from $1.4 billion this year to $4.3 billion in 2011.
Rapid growth
“Video is projected to be the fastest growing segment of the online ad market, and Maven will significantly help advance Yahoo!’s strategy, expanding the video opportunity for publishers and increasing the efficiency and effectiveness for advertisers. This is a big win for publishers, advertisers, consumers and for Yahoo!,” said Hilary Schneider, EVP, Global Partner Solutions at Yahoo!
Industry insiders widely expect Microsoft to up its offer for Yahoo in the next few weeks, and many feel that ultimately it will be successful.
Yahoo shares fell one percent, or 30 cents, to $29.57 Tuesday while Microsoft shares rose 13 cents to close at $28.34.
February 13, 2008
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