Working at Yahoo is getting riskier by the day. Even before merger-minded Microsoft could lay off some of the stars within its acquisition target, Yahoo executives beat them to it.


But there are some key Yahoo employees who are so indispensible for their experience, skill or leadership, that Microsoft would be crazy to let them go in the event of a merger, observers, insiders, and former Yahoo employees say.

Several of those mentioned by sources as vital to Yahoo were among the casualties of Tuesday's layoffs, which totaled an estimated 1,100. The layoffs are the latest black spot for Yahoo, which has been struggling to redefine itself in the shadow of Google's dominance in both search and online advertising. In an attempt to better compete with Google, Microsoft has made a $31-a-share offer for Yahoo, but Yahoo's board has rejected it as too low.

"The company was significantly overstaffed and with a coming consolidation with Microsoft there is going to be pretty dramatic overlap," said Jim Barnett, who left Yahoo in 2003 and is now chief executive of Turn, an automated targeting ad marketplace.

One of the main reasons Microsoft is aiming to buy Yahoo is to improve its expertise on the Web--a market the software giant has yet to dominate despite its best efforts. Even though Yahoo has been struggling, the Internet company is viewed as rich with valuable online brands and talented people. Microsoft will likely want to keep Yahoo employees in a host of areas, including online advertising, social media, and Web search.

http://www.news.com/Memo-to-Microsoft-Yahoos-A-list/2100-1022_3-6230484.html?tag=nefd.lede