December 10, 2002 12:32 PM PST

Yahoo reduces enterprise services staff

Web portal Yahoo is laying off an unspecified number of employees in its Dallas and Atlanta offices in an effort to streamline its enterprise services business.

The cuts will primarily affect two units within the Yahoo Enterprise Solutions division: Broadcast and NetRoadShow, which provide Web streaming-media services for consumers and corporations, respectively. Both businesses were part of Yahoo's $5 billion acquisition of Broadcast.com in 1999.

"We are committed to channeling resources toward a more focused set of businesses that will help drive long-term growth," read a Tuesday memo written by Jim Lewandowski, vice president of Yahoo Enterprise Solutions. "As part of this effort, we are conducting a reduction in force within our Broadcast and NetRoadShow organizations today."

The cuts are part of a realignment of the Enterprise Solutions division's efforts. In the coming year, the division will focus on its enterprise instant messenger service, its My Yahoo site for businesses and other "communications and collaboration offerings," according to Yahoo spokesman Chris Homan.

Homan added that the division will continue to sell corporate Webcasting services.

The layoffs come two months after Jim Fanella, the head of Yahoo Enterprise Solutions, resigned for personal reasons. Sources close to Yahoo said Fanella's resignation raised questions about the long-term prospects of Yahoo's business in selling online services to corporations.

Earlier this week, Yahoo said it would discontinue Broadcast.com's Web Site Services, which hosts Web sites for consumers and businesses. The closure was part of Yahoo's launch of a dedicated Web hosting service for small businesses.

Yahoo's Enterprise Solutions division was created as a way to sell its Web portal features to companies. Large corporations could purchase Yahoo's software to power internal Web sites for employee or company information. Yahoo also sold Webcasting services for companies to broadcast private communications or events through NetRoadShow.

The current financial health of Yahoo Enterprise Solutions is unclear. The division's revenue is grouped under the company's "Fees and Listings" category, which has witnessed growth from premium services such as personal ads and enhanced e-mail.

 

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