Yahoo's Lame Layoff Excuse

Sam Gustin writes: Don't be fooled by Yahoo's reason for cutting up to 10 percent of its workforce tomorrow. In its third quarter earnings call, C.E.O. Jerry Yang and others will point to a need to cut costs amid a deteriorating economic climate.

It's more like a deteriorating management team.

Since Terry Semel was ousted as top dog amid Yahoo's then-seemingly weak market share and poor stock performance, all Monsieur Yang has managed to do is extend Semel's work, turning down a lucrative offer from Microsoft and letting shares fall and fall and fall. Where Microsoft once offered $33 per share and Yang balked, Yahoo shares are now trading at $13.

And where is Carl Icahn in all this? He's said nothing on his blog, and has seemed to have turned his sights elsewhere, on the current bailout crisis (which, admittedly, is a bigger deal).

Yahoo's got some remaining hope -- but let's not rule out more bungling.

The company is staking much on its pending search ad pact with Google -- which Yahoo hopes will generate $800 million in additional revenue. But that deal has been delayed by Justice Department investigators.

And last week, Microsoft chieftain Steve Ballmer suggested that a Yahoo purchase could still make sense for both companies -- but his company quickly backed away from the comments.