Yahoo to close more services after 600 layoffs

December 16, 2010 By MICHAEL LIEDTKE , AP Technology Writer

(AP) -- The content-sharing site Delicious may not be on Yahoo Inc.'s shrinking menu of online services much longer.

Although a final decision evidently hasn't been made, Delicious is on a list of services that Yahoo is planning to close after shedding 600 employees, or about 4 percent of its work force, earlier this week.

An internal Yahoo slide containing the endangered list was posted on the Internet Thursday. The presentation was shared through Twitter, whose popularity may be one of the reasons that Yahoo no longer prizes Delicious as much as it did five years ago when it bought the site for an undisclosed sum.

In a statement, Yahoo confirmed it will phase out several services in the coming months without specifically mentioning Delicious. The company, based in Sunnyvale, Calif., said it would provide more details "when appropriate."

Other services on Yahoo's "sunset" list include MyBlogLog, Yahoo Buzz, Yahoo Picks and Yahoo Bookmarks.

They would become more detritus in a housecleaning that Yahoo CEO Carol Bartz began shortly after she was hired to engineer a turnaround nearly two years ago. She has closed or sold a variety of unprofitable or little used services so Yahoo could focus on other areas more likely to attract traffic and sell advertising. Some of the priorities heading into 2011 include mobile, communications and local services.

Bartz's strategy hasn't paid off yet, with Yahoo's revenue growth still lagging other Internet rivals such as Google Inc. and Facebook, leaving its stock price in the doldrums.

Yahoo shares gained 6 cents to close Thursday at $16.51. The stock price is down slightly for the year and hasn't come close to approaching the levels it reached during the spring of 2008 when Yahoo was still mulling a takeover offer from Microsoft Corp. Those talks ended after Yahoo balked at Microsoft's last offer of $33 per share in May 2008.

Yahoo bought Delicious at a time when its then-CEO, Terry Semel, was trying to build a social hub. He would later try to buy Facebook for $1 billion, only to be turned down by that social network's founder, Mark Zuckerberg, who was just named Time magazine's person of the year, for building one of the world's most influential services.

Delicious started in 2003, a few months before Zuckerberg began working on Facebook in his Harvard University dorm room.

In a Thursday e-mail to The Associated Press, Delicious founder Joshua Schachter said he regrets selling his creation to Yahoo. He left Yahoo in 2008 and is now working on a new startup, called Tasty Labs, that is trying to turn social networks into a more useful business tool.

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