Internet

China's most popular search engine Baidu apologized Wednesday for hosting links to pornographic content after it was criticized by the government, saying it was sorry for the negative impact on society.

The Chinese government blocks access to many Web sites it considers subversive or too political, and Internet companies regularly self-censor to keep from running afoul of the authorities.

Yahoo on Wednesday began notifying employees who are among 1,500 to be laid off this year.

The struggling Internet company, which announced the 10 percent workforce reduction in October, notified a majority of those affected. The rest will find out by the end of the month, Yahoo says.

Yahoo plans on consolidating offices in North America and closing a handful of offices in northern Europe. It says it will hire aggressively in lower-cost locales such as Eastern Europe, India and Southeast Asia.

One of Yahoo Inc.'s largest shareholders, Ivory Investment Management LP, is urging the Internet company to pursue a sale of its search unit to Microsoft.

In a letter to the company's board, the investment firm proposed a deal Wednesday in which Microsoft would acquire Yahoo's search engine and Yahoo would retain 80 percent of revenue generated by search queries on its own site.

The wobbly economy is perking up at least one Internet business: online coupons.

This winter, 38.6 million Americans will use online coupons, up 22 percent from the same period last year, says Simmons Market Research Bureau.

Online coupon services such as Coupons.com, RetailMeNot.com and CoolSavings.com offer coupon discounts on a range of products from Nintendo Wii to DVDs to food and toys.

A report in the Sunday Times [of London] that Microsoft Corp. is in talks with Yahoo Inc. to buy the U.S Internet company's online search business for $20 billion is "total fiction," according to a key executive cited by an influential U.S. blog.

The Sunday Times, which did not cite its sources, said the proposal under discussion involves a complex transaction that would see the U.S. software giant support a new management team to take control of Yahoo.

It comes as little surprise to analysts who have been watching the Yahoo drama unfold over the past six months. CEO Jerry Yang, 40, is stepping down and the company is hunting for a new chief who can pull the Internet company up by its billion-dollar bootstraps and compete with Google.

Yang, Yahoo's cofounder, will return to his former role as chief yahoo and continue to serve on the board. Right now, he seems to be a scapegoat for Yahoo's woes -- but are those really his fault, or was Yang set up from the start?

An Adamant Yang

Under the watchful eye of law enforcement in 40 states, Craigslist pledged Thursday to crack down on ads for prostitution on its Web sites.

As part of Craigslist's agreement with attorneys general around the country, anyone who posts an "erotic services" ad will be required to provide a working phone number and pay a fee with a valid credit card. The Web site will provide that information to law enforcement if subpoenaed.

In a move to protect and advance the human rights of freedom of expression and privacy, the Global Network Initiative was launched Tuesday. But for all the big names in technology, human rights, academics and communications, some privacy advocates say this initiative fails to address the depth of the issue.

The initiative was formed to provide a systematic approach to resist efforts by governments that try to enlist companies in acts of censorship and surveillance that violate international standards. Google, Microsoft and Yahoo are among the Internet companies leading the charge.

Yahoo is laying off at least 1,500 workers in the wake of sluggish corporate profits. The layoffs equate to 10 percent of the Internet company's workforce.

Yahoo stumbled in its third-quarter earnings report. Revenues were $1.79 billion for the quarter, a one percent increase compared to the year-ago period. But operating income was $70 million, a 53 percent decrease from $150 million in the same period of 2007.

For more than a year, European data privacy officials have been battling with U.S.-based Internet search engines, trying to get them to conform to European restrictions on the storage of personal information gleaned from the Web.

Now, as the U.S. titans Google, Microsoft and Yahoo continue to retain personal data beyond the six-month time limit established this year by the European Commission, regulators say their patience is running thin.