Internet icon Yahoo Inc. (YHOO) is seeking to boost profits, and thus boost related exchange traded funds (ETFS) and pacify investors who have been demanding more action to reverse the steep decline in the company’s stock price. Co-founder Jerry Yang has decided to lay off hundreds of employees in an attempt at recovery from misdirected management, reports Michael Liedtke for Associated Press.

This is the company’s biggest makeover since the dot-com bust, and the Sunnyvale-based company’s decision is not firm in the number of layoffs. Securities analysts are calling for a 5%, or 700-worker downgrade, from the 14,000 employee payroll. Yahoo could save around $100 million if those numbers are targeted, reports a JP Morgan Chase analyst.

Job cuts are also poised to help Yang re-establish Yahoo as a main entry point into the Internet and create a more compelling online advertisement network. Internet HOLDRs (HHH), with 20.4% in Yahoo, and First Trust Dow Jones Internet Index (FDN), with 9.9% in the company, could be gearing up for a much-needed boost. Both funds are currently below their trend lines.

Tags: Technology