Yahoo: Outsource Search To Google, Cut Staff 25%, Bernstein Advises

Barrons reports

Lindsay’s advice: outsource search to Google, and cut staff by as much as 25%. He thinks the company could boost 2008 operating income by $565 million, and EPS by 24 cents, by outsourcing search; cutting a quarter of the staff could add another $658 million in operating income, and another 28 cents in EPS, he figures. He also contends Yahoo needs to restructure its display advertising business to boost growth to the industry average; if they can do that, he writes, the company can add another $376 million in revenue and 15 cents in EPS.

This is the best thing Yahoo can do now. Yahoo can quit the search war and Microsoft will take care of Google.