Yahoo’s slightly higher net revenue was something of a relief to investors, said Robert Hof in BusinessWeek online, but that’s “cold comfort to some 1,500 Yahoo employees who will be laid off” before year’s end. Yahoo’s search advertising revenue was up 20 percent, but the company made a “hefty cut” to its quarterly forecast. The news could have been worse, but the layoffs will certainly “hurt morale” and might quicken the exodus of talent.

Actually, the job cuts were Yahoo’s “most encouraging news,” said Fortune’s Yi-Wyn Yen in CNNMoney. But while investors liked the cost-cutting, “it’s hard to see how Yahoo can slash its way back to greatness,” if there’s even a path left. Yahoo’s rejection of Microsoft’s takeover bid rankles some investors, and an ad deal with Google is “tied up by the feds.”

Google is benefitting from Yahoo’s pain, said Andy Greenberg in Forbes online. The economic downturn has hit Google’s ad revenue and bottom line, but not as much as at its competitors.

Still, “Yahoo has been Wall Street’s piñata” for so long, said Jeff Segal in Breakingviews, that it actually looks like a bargain now. At least for “investors with a penchant for risk,” Yahoo could turn out to be “a junkyard treasure.”