Yahoo! decided to freeze annual pay raises, as the online ad market has slowed down, Bloomberg reported Thursday.

Yahoo's annual bonus programme and some workers, including those getting promotions, will not be impacted, spokesman Brad Williams told Bloomberg in a telephone interview.

He added that Carol Bartz, the new chief executive officer, was involved in the decision, Bloomberg reported.

Yahoo! shares dropped 31 cents to US$11.28 on the Nasdaq Stock Market by 4 p.m. New York time Thursday. It has plummeted 43 percent in 2008, Bloomberg reported.