Yahoo looks to e-commerce to save its bacon

ONETIME INTERNET GIANT Yahoo has revealed that it will turns its attention to e-commerce in a bid to revive its fortunes.

Yahoo, which is now headed by ex-Paypal boss Scott Thompson, said it will continue ploughing money into media content and email but will also have a division that deals with e-commerce. Thompson told staff in a memo, "To be very clear, our highest priority is winning in our core business, and that will earn us the right to pursue new growth opportunities."

Thompson's problem is that no one really knows what Yahoo's core business is anymore. The firm left the web search game when it signed a deal with Microsoft to drive its search results using Bing, and in terms of media content it's hard to see how Yahoo has gained anything from owning web sites such as Flickr.

Yahoo's venture into e-commerce is not necessarily a bad one. After all Thompson's work at Paypal means that he has extensive experience in this area. E-commerce is likely to grow with technologies such as NFC gaining acceptance, and quite frankly Yahoo has run out of alternative areas in which to invest.

Last week Yahoo announced that it will lay off 2,000 employees as part of a plan to cut expenses. Thompson said that the heads of the three new divisions will be presenting their plans in the coming weeks, however with Yahoo set to announce its financials next week, the firm has until then to show it has the skeleton of a plan in place. µ