Yahoo! Gets Nimble to Focus on Core Businesses

The following commentary comes from an independent investor or market observer as part of TheStreet's guest contributor program, which is separate from the company's news coverage.

NEW YORK ( Trefis) -- Yahoo! ( YHOO) has gone ahead with its restructuring plans and confirmed that it has cut 2,000 jobs in various divisions, amounting to around 14% of its total workforce. This is one of Yahoo!'s biggest layoffs yet and comes at a time when Yahoo! is struggling to keep up with its competitors in markets it once dominated -- search and display advertising.

Yahoo! CEO, Scott Thompson, announced that it plans to save around $375 million following these layoffs, and create a smaller, nimbler structure which is more profitable and able to innovate more quickly in order to compete with the likes of Google ( GOOG) and Facebook.

Check out our complete analysis of Yahoo!

As part of the restructuring, Yahoo! will now focus on some of its core businesses -- its media and content properties, and online platforms.

Yahoo! still has nearly 700 million users on its core online properties, which if monetized properly, can generate a significantly higher amount of revenue. Thanks to its platforms and online properties, Yahoo! also has a treasure trove of personal information about its users which it plans to leverage to create more personalized experiences, increase engagement on its website, and ultimately generate more ad revenue.

We currently have an $18 Trefis price estimate for Yahoo, which stands nearly 20% above its market price. Display and search advertising generate most of its revenue.

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This commentary comes from an independent investor or market observer as part of TheStreet guest contributor program. The views expressed are those of the author and do not necessarily represent the views of TheStreet or its management.

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