• August 3, 2009

As many as 400 Yahoo employees could lose their jobs in connection with the company's search deal with Microsoft, according to a New York Times report. In an interview with the newspaper, Yahoo CEO Carol Bartz explained that cutting the marketing and infrastructure costs related to search through the partnership will help Yahoo to boost investment in other businesses including display advertising, content and mobile services.

Since the deal was announced last week, Bartz and Microsoft CEO Steve Ballmer have spent much time defending it against widespread criticism that Yahoo got taken to the cleaners, especially in not getting an upfront payment from Microsoft. Bartz conceded that she hadn't taken enough time "to explain Yahoo's future" and didn't help things by talking about "boatloads of cash" earlier this year in connection with a search deal.

The move did win praise, however, from investor and board member Carl Icahn, who called the search agreement with Microsoft "an excellent deal" for Yahoo. The billionaire stock activist last year pushed for a Yahoo-Microsoft merger and the ouster of former CEO Jerry Yang. Yahoo's share price fell almost $3 last week to $14.32 as Wall Street remained skeptical of the deal. --Mark Walsh