We mentioned some part of this before, where Yahoo was considering strategic options for Kelkoo, the European comparison shopping site it owns. Now, in an FT story, Toby Coppel, the new-ish head Yahoo’s European business, has given an ominous warning: Yahoo staff have been given until Q1 2008 to revamp the poorly performing parts of its European business, or these will be closed down or sold, the story says. Even CEO Jerry Yang said as much in the Q3 earnings call in October: We “plan to shut down a number of other one-off services throughout the world over the coming months.”

Coppel said that Yahoo now wants to focus only on services that users could use/view on a daily basis. News, sport and stock market information are among these. Other areas would have to justify their value or be closed down. Yahoo is not planning to increase local offerings or staff, the story says..instead, it is hoping it will attract more users simply by creating a slicker product, as if that was easier.

What that means: it may be looking more at partnerships to build up bulk in Europe, similar to a deal it did with Bebo last month. It might also mean it add some third-party components/data to its search as well (Quaero or Theseus, anyone?).

Coppel, who was formerly Yahoo’s chief strategy officer, took over the European leadership role in April. Yahoo has big challenegs in Europe: its search share here is a mere 3.2 percen, compared with 18 per cent in the US and 14 per cent worldwide, according to Comscore.

• Yahoo Considering “Strategic Options” For Comparison Shopping Service Kelkoo in Europe
• Earnings: Yahoo Execs Focus On Progess, Setting Expectations