The second largest search engine on the Internet, Yahoo, announced it would cut 1,000 jobs by February after the sales in the fourth quarter dropped 23 percent, the company announced on its Web site. The latest figures have shown that Yahoo Inc’s shares dropped 10 percent on Tuesday, reaching $18.70 at the end of the day, which made the company representatives reconsider the employees’ number, that will be cut down by approximately 14.3 percent.

According to the company’s estimations, the net income for the last quarter ending December 31 dropped approximately 60 million dollars compared to the same period a year ago, while the operating income fell 38% compared to last year, to $191 million. Yahoo chief executive Jerry Yang announced in a press conference that the 1,000 job-cut will earn Yahoo an estimated $20 to $25 million, and that part of the employees will be redirected to other jobs.

 Despite the fact that Google took the lead in search engine users, Yahoo is making a great deal from its online display advertising, and company representatives try to stay optimistic for 2008. It will be tricky though, now that Google is ready to take advertising specialist DoubleClick onboard and set the bar even higher for its competitors.

Yang said he expected this year to find Yahoo on a more competitive and stronger position than ever, and that Yahoo’s future looks promising for the years to come: “We’re not tinkering around the edges,” he said. “We’re making significant and game-changing investments in Yahoo’s future,” he added, estimating that online advertising display accounted for 40 percent of the company’s total revenue.

Google is expected to remain a strong contender for Yahoo, especially in 2008, when analysts think it will not give up its leader position. Yahoo however is not satisfied with second place and in December 2007 beat Google by 4,000 visitors. A small victory one would say, but Yahoo representatives remain optimistic and try to develop new strategies to keep the search engine in the top league.