Yahoo may cut more than 1,000 jobs

Yahoo Inc., the Internet company that rejected a takeover offer from Microsoft Corp., is considering whether to eliminate more than 1,000 jobs, a person familiar with the matter said.

The company, owner of the second most popular search engine, hired consulting firm Bain & Co. in September to review its costs. The latest reductions would be bigger than a round of 1,000 job cuts in January, said the person, who asked to remain anonymous because the discussions are private.

Yahoo, which had 14,300 employees at the end of last year, is slashing expenses as advertisers cut back on Internet promotions. The online ad industry may lose $6.7 billion in business because of collapsing credit markets, according to Collins Stewart PLC.

Yahoo, based in Sunnyvale, Calif., dropped 4 cents to close at $12.86 yesterday. The shares have fallen 45 percent this year, dragging down Yahoo's market value to less than $18 billion.

Yahoo spokeswoman Kim Rubey declined to comment.

Microsoft, striving to compete with online-ad leader Google Inc., offered as much as $47.5 billion for Yahoo this year. Microsoft dropped the bid after Yahoo asked for a higher price.

Yahoo opted instead to form an advertising partnership with Mountain View, Calif.-based Google, agreeing to run some Google ads alongside its search results. The deal faces opposition from advertisers, competitors, and consumer advocates, who say it will harm competition. The two companies said this month they would postpone the program until US regulators complete a review.

Microsoft chief executive Steve Ballmer said last week a deal between his company and Yahoo might still make economic sense.