Yahoo Fiddles While Rome Burns

The Wall St. Journal is reporting that Yahoo is poised for eliminate more than 1,000 jobs as it battles to remain viable amid fierce competition and a tumultuous economic landscape.

That’s it: 1,000 positions?

Not to be disrespectful or dismissive about the idea of 1,000 people losing their jobs but Yahoo is being timid when it needs to be bold. It’s nibbling at the edges right than take a big strategic bite, which seems strange given Jerry Yang’s infamous 100 Days Promise.

While reducing $100-million of operating senses will gain some approval, what Yahoo really needs to do is determine what it wants to be. This is a particularly urgent mandate given it will more difficult to hide assets that are performing well or strategically valuable when economic times are tough.

One area that Yahoo has yet to address is its huge portfolio of online services, including the many startups it has acquired in recent years (Zimbra, Blue Lithium, Maven Networks, Right Media, Flickr, del.ico.us, MyBlogLog, etc.)

In many respects, Yahoo is trying to be all things to all people but it means a scattered focus. Although this is far from the best time to be pruning assets, Yahoo needs to look at whether some businesses need to be closed or sold. Yahoo operates a vast empire so there must be some room for a more focused approach.

Update: Yahoo is embracing the “open” movement as we move to – shudder – “Web 3.0″ but it strikes me as more of a distraction than being focused.

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