Microsoft Deal to Cancel Yahoo Pink Slips?

The acquisition of Yahoo would present Microsoft with several obvious advantages.

Steve Ballmer, CEO at Microsoft, said during a presentation to media and analysts that the proposed merger will offer “scale economies” and “operational efficiencies.” Those are usually euphemisms for layoffs.

But not necessarily in this case. Microsoft is also hoping to get a bigger slice of the online advertising revenue pie, which Ballmer noted is expected to grow from $53 billion in 2008 to $78 billion in 2010. Yahoo has already developed Panama, an online ad system, but more work needs to be done.

Yankee Group analyst Laura DiDio noted that since Yahoo has already said it would send pink slips to some 1,000 employees, Microsoft won’t have to do the dirty work. And the analyst speculated that the merger could actually save engineering jobs.

“Ballmer already said there would be a retention package for the engineers,” she told eWEEK.

While some jobs may be “rationalized” in human resource, accounting and payroll departments, research and development jobs are likely to be spared. Experienced hands will be needed to develop the better user experience, said DiDio. “You can actually create more jobs in some areas,” she said.