Those of us of a certain age will no doubt remember the line from Swingers in which Trent (Vince Vaughn) is giving Mikey (Jon Favreau) a pep-talk to go hit on a girl at a bar by comparing him to a ‘big bear’:

Yeah, man just kinda… you know, you got these claws and you’re staring at these claws and your thinking to yourself, and with these claws you’re thinking, “How am I supposed to kill this bunny, how am I supposed to kill this bunny?”

To take that analogy to the web sphere, that bear is starting to remind me of Yahoo! with the bunny being the entire Internet community.

It now appears that just as Erick Schonfeld of TechCrunch predicted two days ago when he heard about Yahoo employees being asked to turn in their computers, Yahoo may very well be on the verge of some massive layoffs, upwards of 10% of the company. Silicon Alley Insider received a tip yesterday that that as many as 1,500 – 2,500 jobs may be eliminated depending on what happens to the company share price after they announce their earnings on January 29th. Rafat Ali of paidContent.org heard the same thing at the beginning of the month. Smoke begets fire.

And so again I’m left wondering, what the hell is Yahoo doing? They have the most – again, I say the most – trafficked webpage on the Internet with yahoo.com, the most widely used email with Yahoo Mail, arguably the leading photo site with Flickr, the leading bookmarking site with Del.icio.us, et cetera et cetera…and still they struggle mightily to make ends meet? Why can’t they kill the bunny?

I know its been said ad nauseum, but they first and foremost need to realize that they cannot win an arms race with Google and Microsoft. They are John Edwards to Hillary Clinton and Barack Obama at this point. They get second in some races, like search, but as time goes on, if they stay in the race, they’re going to keep becoming a more and more distant 3rd – which is too bad, because they are a solid candidate, they just don’t have the capital to match the top two.

They need a completely new strategy, one that thinks outside of the box. They are doing some nice things such as ‘search assist‘ and bulking up in the mobile advertising sector, but I’m not sure either of those are nearly enough outside of the box. Eventually Google is going to move into both of those areas, and then what?

They need a solid way to leverage what they have. I keep repeating that they should be looking no further than services of their’s like Flickr, and now it appears they are doing that with the Del.icio.us integration in Yahoo Search, but will they commit to it enough so that it is actually more than just a novelty?

I don’t know if this all stems from when their $1 billion dollar offer to buy Facebook was spurned near the end of 2006, but since that time, Yahoo has almost been sitting around in neutral while their competitors go on full-steam ahead. They now keep launching social site after social site, all of which fail to get off the ground, when they don’t seem to realize or acknowledge that they already have the #3 social site in the world with Flickr.

And so I say to Yahoo from the same scene in Swingers a few seconds later:

And you got these fucking claws and these fangs, man! And you’re looking at your claws and you’re looking at your fangs. And you’re thinking to yourself, you don’t know what to do, man. “I don’t know how to kill the bunny.” With *this* you don’t know how to kill the bunny, do you know what I mean?

To which their friend Sue adds:

You’re like a big bear, man.

[UPDATE 1/21]: The New York Times is putting the layoff number in the hundreds rather than thousands but warns that nothing is set in stone yet and won’t be until after the January 29th call.

[UPDATE 1/22]: A new post on GigaOM basically is a big “ditto” to the point I was trying to make and they go even more in depth.