Yahoo is falling behind because it's stagnant, not because its cost are too high. Yahoos products are mostly free, and it's a very different industry from retailing or machine manufacturing.

Yahoo does not need to cut costs. Cashflow is fine in the company. Cutting costs would be silly at this junction - it does nothing at all to address the problem.

It's like a guy who gets his leg cut off, and your solution is to bind the leg. Yes, that helps, but he'll still die if you don't actually fix the wound.