The Collapse of Yahoo!

In News, Online on June 20, 2008 at 3:00 pm

Three weeks away from the blog, and so much shit has happened in between that I don’t know where to start with this mountain of information staring at me. Oh, BTW, Firefox 3 just rocks my pants off, whatever that means.

Once again, in a week following the strange Yahoogle deal between Yahoo! and Google to essentially let Google Ads run on Yahoo! searches, the knives are out for Jerry Yang more than ever. Dvorak has made a bleeding heart petition for shareholders to lay off Jerry Yang in his latest Marketwatch column, calling out so-called “investors” who want the company to be sold as mere speculators. Here’s an excerpt.

If you’re an investor in Yahoo, my guess is that you’ve chosen to invest in a company, its employees and its future. Selling out to Microsoft only assures a pathetic end of this investment.
And you all seem so pleased at the idea that Yang, the founder with nothing but good intentions, would, at the drop of a hat, take his life’s work, the top Web site in the world, a site full of tools used by millions of people, and sell it to Microsoft just because Microsoft wants it.
Oh, and let’s not forget the thousands of people who productively work for Yahoo. Who cares about them?
Did I also mention that Yahoo is an important and famous American institution?
So Yang wants to keep Yahoo as Yahoo. And you are all stunned, indeed flabbergasted by this.
How sick and greedy are you?
While he does have a point in not letting the likes of Carl Icahn take over the company so that Yahoo! can be sold to Microsoft for the “shareholders’ interest”, it’s increasingly unwise to let Jerry Yang continue to run Yahoo! It’s a critical time for the company, when strong leadership and direction is needed–and Yang is obviously not the man to steer the company in the right direction. As one of the comments pointed out, it’s Jerry Yang who hired Terry Semel, the person who made Yahoo! the shambles that it is today, so Yang isn’t the faultless saviour-to-be here.
Compound this with the recent departure of Flickr’s founders, Stewart Butterfield and Catrina Fake, from Yahoo! and you have all the signs of weakening leadership. Butterfield sounds so jaded and confused by what was going on with Yahoo!. He writes in his resignation letter:
“When I joined Yahoo back in 21 it was a sheet-tin concern of great momentum, growth and innovation,” Over the decades, as the company grew and expanded, first into dies and punches, into copper, corrugated steel, synthesized rubber, piping, milling equipment, engines, instruments, weaponry and so on, I still felt at home, because tin was the core of the business.

“By the time of the internet revolution and our expansions into Web Sites, I have been cast adrift. I tried to roll with the times, but nary a sheet of tin has rolled off our own production lines in 30 years!”

“I don’t know what you and the other executives have planned for this company, but I know my ability to contribute has dwindled to near-nothing…”

So 1,000 jobs slashed, a cost-cutting move from UK to Switzerland, and the loss of their top brains, including vice president Bradley Horowitz, who left for Google. Yahoo! sounds like it’s crumbling fast. And there’s hardly word on what the plan is to save the company: Team up with Google? Blah. That’s a pittance.

The latest TWiT episode had me pumping my fist into the air when Wil Harris summed it up: “What Is Yahoo!?” I don’t think the company knows: is it a portal, a social networking site, a search engine, a platform? What does it intend to be? Unlike Google, which has a long-term future idea of “Cloud Computing” or Facebook and MySpace destined to be a “Platform,” no one knows what Yahoo! is or will be.

It’s a pity that Yahoo! is crumbling the way it is. Yang won’t be there for long.

  1. I don’t want Yahoo! to be sold to Microsoft. But the counter-argument is that Yang and board have to act in the best interests of the shareholders. Microsoft really offered a huge premium – a premium one could argue Yahoo! couldn’t achieve on its own as an independent company.

    Would you rather Yahoo! stay independent and true to itself as a Web company? Who else could offer Yahoo! a better deal? Google’s not going to – and anti-trust regulators wouldn’t allow it to happen anyway. There’s already great scrutiny against the advertising partnership.

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