Yahoo! ( YHOO) CEO Carol Bartz can cut costs, but there's no indication she can make a recovery happen.

Another mixed quarter, another round of layoffs, another hilarious sprinkling of foul language on a conference call, and once again more promises that Yahoo! will build on its strength in online advertising.

Still lacking, however, was any discussion of Microsoft ( MSFT) and a potential deal to combine some search efforts to relieve expenses and spread Yahoo!'s reach in an ad market dominated by Google ( GOOG).

Bartz's certainly has her hands full. She took over a mutinous ship that had run aground amid a devastating, advertising-crushing economy. Investors cheered Bartz's effort Wednesday to at least steady the company and bring costs down. The stock has risen 5% since Yahoo! reported earnings Tuesday.

Yahoo!'s costs fell about $600 million last quarter after the company eliminated 1,600 employees and slashed capital spending by 50% from year-ago levels.

As for a growth plan, Bartz believes that companies will have to spend on ads to build brands and keep or even increase market share. To address that, Yahoo! plans to use its search results to better target banner and display ads. Imagine that: Matching ads to user interests? Yahoo! could really be on to something here.

Meanwhile, some key trends continue to deteriorate.

Costs per clicks, the price Yahoo! charges for each ad clicked, fell 16% from the year-ago quarter, and the revenue per search was down 22% over the same period, according to Collins Stewart analyst Sandeep Aggarwal. Another troubling measure was page views, the lifeblood of a Web site's advertising value, which grew by 8% in the first quarter, the slowest rate in the past five quarters, Aggarwal noted.

In response to Aggarwal's question about page view growth during the post-earnings conference call, Bartz said she expects page views to accelerate as Yahoo! works to "fully globalize all of our platforms" and by making sites more engaging.

Investors were happy to look beyond Bartz at the bigger problem: the economy. The belief is if the recession eases, Yahoo! will be in better shape.

"Traditional media continues to collapse," says one money manager who likes Yahoo!, adding that "the winds are blowing in favor of Yahoo!"

With roughly 700 new job cuts coming, Yahoo! at least looks like it's planning to one day raise anchor.

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