Still, the layoffs, Yahoo's plunging stock price and the sagging revenue will no doubt re-ignite the criticism from naysayers who blame Yang and Yahoo's board for causing the collapse of Microsoft's attempts to buy the company earlier this year.

In May, after a three-month pursuit, Microsoft walked away from the deal after a $33 per share offer was rejected by Yahoo's board, which sought a $37 per share offer. Yahoo's stock closed at $12.07 on Tuesday.

In addition, Yahoo's results look particularly bad when compared to those of its rival, Google, which reported solid third-quarter results last week. Both Google and Yahoo generate most of their revenue from on-line advertising.

Google reported revenue of $5.54 billion for the quarter, up 31 percent compared with last year's third quarter. Net income was $1.35 billion, or $4.24 per share, compared with $1.07 billion, or $3.38 per share, in 2007's third quarter.

A big difference is that Google's revenue comes mostly from search advertising, a segment it broadly dominates and which makes up the largest, most robust on-line ad format. Yahoo, on the other hand, is stronger in display advertising, where demand has weakened.