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Can Yahoo Be Saved?


The one-time Internet leader is preparing a massive 'restructuring,' and that means layoffs.

It was once everybody's default search engine, the email provider of choice, the hipper-than-AOL site. But it has been at least five years since Yahoo (YHOO) has been hip, at least in the US. Americans turned their attention elsewhere, and investors and advertisers followed.

The latest news won't help: Yahoo's new chief Scott Thompson is planning a massive restructuring of the business, with layoffs likely numbering in the thousands, according to Yahoo has about 14,000 employees.

In another scoop that may well be related, reported that Prabhakar Raghavan, the head of Yahoo Labs and a key strategist for the company, is jumping to Google (GOOG) after seven years at Yahoo.

In short, Yahoo's brains are draining.

Years of relentless bad news obscures the fact that Yahoo remains the third most-visited site in the world, behind only Facebook and YouTube, according to Google's latest list of the top 1,000 sites.

It also obscures the fact that creative people inside Yahoo are still trying to compete, in spite of the turmoil at the top. It just launched a comedy channel featuring original programming, from partners including Will Ferrell and Ben Stiller. It also is expanding its small business site with a service called Small Business Advisor.

Yahoo's Canadian division is even reportedly considering buying the Canadian broadcast rights for the 2014 and 2016 Olympics. So, Canadian viewers might wind up watching the next Olympics via an Internet-only streaming service.

This might not be as surprising to Canadians as it would be for Americans. Yahoo is more popular there than it is in the US.

Yahoo has neither confirmed nor denied that it is planning layoffs, beyond some official yada-yada in late January about its plans to focus on "aligning resources behind key areas of focus." It also projected income in the first quarter in the range of $105 million to $155 million, way lower than the $184.2 million that analysts were expecting.

Weekly Web In Brief:

Zynga Goes Live
Social game maker Zynga's (ZNGA) solo site began its beta test on Monday, and judging by the front page it's going OK so far: "1,064,062 people playing now," read a banner at the top of the page about five hours after the site went live with a selection of its popular titles like CityVille and FarmVille. The company says it is going for a billion users.

The site, announced only last week, was greeted enthusiastically by investors as well as gamers. It gives gamers a destination, and Zynga an identity, separate from Facebook, although Facebook Credits are the only currency accepted at the new site for now.

Zynga stock is up nicely since its debut in December 2011 at $10, though it dropped nearly 6% to $13.97 on Monday after a downgrade to neutral by JP Morgan. The company said it remains optimistic about Zynga, but thinks the stock has climbed far enough for now.

Roger Ebert Nags Netflix
Add Roger Ebert to the chorus of movie fans who are dissatisfied with Netflix (NFLX) over the limitations of its streaming library. The veteran movie critic and prolific Tweeter posted to @ebertchicago that he'd "heard that Netflix has largely stopped buying indie films."

Netflix responded vigorously. A spokesman told CNET that the company licenses films from more than 100 independent studios and filmmakers. It just inked a high-profile deal with The Weinstein Company for films including the Oscar-winner The Artist.

Ebert is stepping into an ongoing quarrel between the company and its subscribers. Netflix lost 800,000 subscribers last summer after changing its price structure. By the end of the year, it had gained 610,000 new subscribers, to a total 24.4 million. But subscribers are still grumbling about a big price hike for those who want both streaming video and DVDs by mail.

Netflix is trying to move its subscribers to streaming-only video. Movie fans know that many selections are available only on DVD. The problem lies in the complexities of studio rights issues. But don't tell Ebert that.

'Oscar Bump' Goes Online
Martin Scorsese's Hugo may be the first movie ever to enjoy its "Oscar bump" over the Internet. reports that Hugo is at the top of the iTunes (AAPL) charts, and in the top five on Amazon's (AMZN) Instant Video picks, after picking up five Academy Awards.

Hollywood studios traditionally hope for big bucks at the box office for their award winners. Hugo is the only movie among the big winners that is already available on DVD and streaming formats.

Nokia's 'Killer App'
In its quest for a comeback, Nokia (NOK) may have a "killer app," says Information Week. It is offering an ESPN Hub for sports fans on its new Lumia smartphones, which use the Microsoft (MSFT) Windows platform.
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