Yahoo's woes continue after it confirmed it will lose the head of its labs unit, Prabhakar Raghavan, to arch-rival Google.
The loss of Raghaven will hurt the firm as his research interests focused on search technologies, with particular interests in text, web mining and algorithm design.
"Yahoo thanks Prabhakar Raghavan for his dedication and contributions to Yahoo for the past seven years," said Yahoo in a statement.
"We wish him well in his next endeavor. Ash Munshi, chief technology officer, will oversee Yahoo Labs."
According to the All Things Digital, Yahoo is about to make large cuts to its labs unit, although the firm has declined to confirm this.
The departure follows the exit of other leading directors at the company including founder Jerry Yang and chairman Roy Bostock, as the firm continues to decline.
In recent years, as Google has dominated the search industry, Yahoo has tried to reinvent itself as a content portal.
That process has proved challenging for Yahoo, though, with former chief executive Carol Bartz fired last September for failing to turn the company around.
Scott Thompson, a former PayPal president, was brought in by Yahoo to take her place at the start of the year.
Elsewhere, Microsoft has confirmed that it has hired Federal Trade Commission (FTC) attorney, Randall Long, who led anti-trust investigations into Google.
Long will join Microsoft's US government affairs team as director of regulatory affairs.
"His deep legal experience will provide important perspective on a range of issues that affect both consumers and the broader technology industry," said Microsoft vice president of US Government Affairs, Fred Humphries.