Hope and fear mark Yahoo at crossroads

By Alexei Oreskovic - Analysis

SAN FRANCISCO (Reuters) - Four months into her fix-it job at Yahoo Inc (YHOO.O), Chief Executive Carol Bartz has worked through an impressive checklist.

The 60-year-old executive has moved swiftly to rebuild the Internet company to her specifications, upending the organizational structure, replacing executives and cutting costs including 675 jobs, or 5 percent of the workforce.

Analysts say that is exactly the kind of shake-up needed at Yahoo, which has seen its sales growth slow and its market share overtaken by Google Inc (GOOG.O) in recent years.

For Yahoo's ranks, still shell-shocked from deep cuts in 2008 -- including 1,600 axed jobs -- the hope that Bartz brings is increasingly mixed with a dose of fear and uncertainty.

Yet broad support remains for Bartz despite the tough talk, canceled holiday parties and forced vacations that have come to define her era.

"We are all sort of wanting to believe in her because we really want to see Yahoo turned around," said one Yahoo insider who wished to remain anonymous for fear of retribution. "But it still doesn't make it any less scary when you don't hear about what's coming up."

With a new round of layoffs under way, and a steady stream of Yahoo sites getting axed, anxiety within the ranks has been exacerbated by what some say is a growing sense of secrecy.

Bartz' famous penchant for tight lips, which initially showed in her emphatic displeasure toward news leaks, is increasingly evident in other aspects of Yahoo's operations. The informal flow of information once common within the company has come to a halt. "Everything is on a need to know basis," the Yahoo source said.