SAN FRANCISCO, January 23 – Yahoo! said on Thursday it is freezing employee pay as it works to curtail costs and improve the pioneering Internet firm\’s fortunes.
The news comes five days before Yahoo! announces its earnings for the final quarter of 2008.
"The executive team decided that providing annual salary increases would not be in the best interests of the company or shareholders," said Yahoo! spokeswoman Kim Rubey.
Some analysts are predicting that newly-appointed chief executive Carol Bartz will shake-up Yahoo!.
Veteran Silicon Valley executive Bartz took over the helm of Yahoo! last week, vowing to revive the ailing Internet giant and calling on critics to give it room to breathe.
Bartz, 60, replaces Yahoo! founder Jerry Yang, who stepped down on November 18 after a rocky tenure as chief executive of the Sunnyvale, California, firm that lasted a little over a year.
Yang, who founded Yahoo! in 1994 with Stanford University classmate David Filo, will remain at Yahoo! and the board said his "iconic stature in the industry makes him an invaluable resource."
Yahoo! has been outshined by Internet-search star Google and stumbling in the wake of a failed courtship with Microsoft, which offered last year to buy Yahoo! for nearly 47 billion dollars.
Yang\’s rejection of Microsoft\’s 33-dollar-a-share takeover bid was met with disapproval by many share-holders including billionaire investor Carl Icahn, who led a revolt against Yang and was eventually named to Yahoo!\’s board.
Microsoft chief executive Steve Ballmer said Thursday that the US software giant remains interested in a search business partnership with Yahoo! and welcomed the appointment of Bartz.
"I?ve been quite public about the fact that there are advantages for advertisers and consumers, for Microsoft and for Yahoo! through a search partnership, and we?d like to do one," Ballmer said.
"I know Carol Bartz well from Autodesk days, and I like to see her at the helm of Yahoo!. If it\’s appropriate I?m sure we?ll have the right discussions."
Google dominates online search with more than 60 percent of the market. Yahoo! has around 20 percent while Microsoft is a distant third with under 10 percent.