Yahoo freezes salaries

Yahoo said it is freezing employee pay as it works to curtail costs and improve the pioneering Internet firm's fortunes.

The news comes five days before Yahoo announces its earnings for the final quarter of 2008. "The executive team decided that providing annual salary increases would not be in the best interests of the company or shareholders," said Yahoo spokeswoman Kim Rubey.

Some analysts are predicting that newly-appointed chief executive Carol Bartz will shake-up Yahoo. Veteran Silicon Valley executive Bartz took over the helm of Yahoo last week, vowing to revive the ailing Internet giant and calling on critics to give it room to breathe.

Bartz, 60, replaces Yahoo founder Jerry Yang, who stepped down on November 18 after a rocky tenure as chief executive of the Sunnyvale, California, firm that lasted a little over a year.

Yang, who founded Yahoo in 1994 with Stanford University classmate David Filo, will remain at Yahoo and the board said his "iconic stature in the industry makes him an invaluable resource."

Yahoo has been outshined by Internet-search star Google and stumbling in the wake of a failed courtship with Microsoft, which offered last year to buy Yahoo for nearly $47 billion.

Yang's rejection of Microsoft's 33-dollar-a-share takeover bid was met with disapproval by many shareholders including billionaire investor Carl Icahn, who led a revolt against Yang and was eventually named to Yahoo's board.