Yahoo to Shut GeoCities’ Marina del Rey Operations

Yahoo will shut down GeoCities’ operations in Marina del Rey later this year, after the companies complete their $3.5-billion merger, according to people familiar with the situation.

Roughly 300 GeoCities employees learned of Yahoo’s plans Tuesday in a meeting led by Yahoo President Jeff Mallett. The Santa Clara, Calif.-based company is still determining how many will be laid off and how many will be transferred to Silicon Valley.

GeoCities shareholders are to vote on the merger May 28. The deal, which was announced in January, is expected to close shortly thereafter.

GeoCities’ office in Marina del Rey will remain open during a transition period that will last through early fall. The company moved there from Santa Monica less than six months ago.

The mood at Tuesday’s meeting was upbeat because GeoCities’ stock option plan will result in a large cash payout for most employees when the merger closes. Many will walk away with options worth several times their annual salaries, according to one source.

And many Southland firms--especially Internet start-ups--are eager to hire GeoCities veterans.

Shares of both companies fell in Nasdaq trading Tuesday. Yahoo shares lost $3.31 to close at $159.25, while GeoCities shares dropped $2.75 to end the day at $105.50.