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Report: AOL Abandons Yahoo Merger As Yahoo Cuts Headcount

The would be AOL-Yahoo merger is apparently off, according to Crain’s New York Business. The site is reporting that “AOL tried to either get enough backing to make a run at Yahoo, or get Yahoo interested in buying it . . . Yahoo didn’t bite, and AOL didn’t have its ducks lined up to be a buyer.”

Yahoo reportedly didn’t receive any formal offer or proposal, however, so it’s hard to know how serious any of this is or was. The article goes on to document some of AOL’s ongoing challenges in the market, though it has had some successes under new CEO Tim Armstrong.

Meanwhile the Wall Street Journal is reporting, consistent with earlier speculation, that Yahoo is about to cut about 5 percent of its workforce, or roughly 650 people:

The cuts will be targeted at Yahoo’s products group, which builds Web properties like the company’s popular news, sports and finance pages, as well as its widely used email service. The group, which recently had about 7,000 employees, is run by chief products officer Blake Irving, a former Microsoft Corp. executive who joined Yahoo in April. Mr. Irving had previously asked unit heads to prepare operational plans that factored in work force cuts of up to 20% . . . Mr. Irving said in a recent interview that he wants the products group to work more closely with regional teams, so they share common goals and responsibility for achieving operational and financial targets.

Apparently the layoffs are scheduled to happen today. What a miserable thing to happen during the holidays. However an AOL-Yahoo merger would probably have resulted in a much larger reduction in force at the combined organization.


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