Six months ago Jerry Yang took the stage at the D Conference to talk about the state of his business. He painted a picture of a Yahoo that was spinning in circles with no clear future.
Fast forward six months and nothing has changed.
Except Yahoo has been left at the altar as Google walks away from their Yahoo search marketing deal.
Except that Yahoo’s share price has eroded another $13, destroying $18 billion in shareholder value
Except that most of Yahoo’s top managers have left the company.
What are they left with? A CEO that still can’t clearly state the core goals. Yang, slouched on stage and devoid of energy, alternated between calling Yahoo a platform company and a destination site. But he also said that Yahoo intends to remain competitive with Google in search, despite the vast differences in resources that the two companies can put towards research.
Yang’s hopes are pegged to their YOS strategy to embrace third party developers and turn things like search into web services.
Perhaps it’s the delivery, but the message isn’t getting through. The audience was left wondering how much longer this CEO has before the company is torn apart from within. Or by outsiders.
What Yahoo needs is a new CEO. They need their Barack Obama - someone to make everyone believe that a true leader is at the helm, ready to fight. Someone with a believable plan. Someone who can inspire Yahoo, and Yahoo users, to believe that Yahoo can once again become a force on the Internet.
That leader is not Jerry Yang.
It’s long past time for change.
Yang must go.
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Couldn’t agree with you more. Good summary!
Jerry is totally clueless and needs to go.
Regards,
Mike
http://www.wannadevelop.com
Ditto
Strike similar search ad deal with microsoft, or just pack it and sell. Sell off unrelated items like web hosting.
Innovate display advertisement, Yahoo, only you can do it..
Time for Microsoft to swoop in and pick it to pieces like the vultures we always think they are.
Well played sir, well played.
why is it that they are not explioiting the patent 360 the same way goog is? mircro dont need to buy them. who wants to buy a dying horse? they can comeback if they acquire and offer strategic multichannel custom location based niche offerings for users and businesses in a personalized natural language format. time to build a real platform.
StrategyLocator.com
Given where the market is, and the fact that YHOO has a heap of cash and no debt, YHOO’s best bet is to wait until the startups start to suffer and swoop in and pick up the best pieces for pennies on the invested dollar.
That opportunity will present itself. YHOO adds traffic to good products. It can do that well. And they can be their products. That’s all it can do and is what it needs to focus on.
Yawnnnnn… so what do you really think?
Hummm are they making a profit? Isn’t that what it is all about? But that does not make good news.
Good for them on not caving into the mass pressure. (As my cousin eloquently states on a regular basis: the masses are asses) The market is better without another conglomerate gobbling up a competitor.
I don’t think so, Y is the great network with many useful services.
It doesn’t matter how many useful services there are, if you can’t relate your products to the end user you product may as well not exist.
Yahoo needs new leadership, but more than that they need a real direction, or Google will simply trample them.
That’s absolutely true. But I can’t understand why Google didn’t already trample them!?
yup..yang should designate himself as an Product Engineer (And he is a good engineer). About vision for the company and fighting competition they need someone aggressive, visionary and “Time tested”. About innovation and products, M$ is still a bad choice as they are known for “copying” and killing innovation. Only interest of M$ in yahoo is for markets share they have in Ad serving. which will definitely kill other innovative products and engineers will be left to do copying and stupid migrating stuff for M$ products. Yahoo and M$ are different they can’t go together.
I don’t think Jerry is a good engineer. Remember, it was Filo and his team that ran most of the engineering in the old days (and maybe even now). Jerry was always known as the face of Yahoo.
They need to open up their ad platform to publishers, rather than still keep it in beta. There are still a ton of publishers with pent up demand for it. Even if it doesn’t pay as well as Google, a lot of publishers want to diversify away from Google. And if advertisers think they can get slightly cheaper clicks there, then they’ll flood into the Yahoo content network.
They never opened it up to small niche publishers and that’s where the valuable clicks are. They’ve kept it in beta for almost 4 years because they are still worried that people are going to be measuring their dick against Google’s dick.
Well we all know Yahoo is shorter, but if they would just open it up they could develop an efficient auction market that would bring in money and give them a larger publishing base so they could actually begin to improve YPN with some real data.
Open that damn thing up Yahoo. Quit worrying that everyone will think you can’t push volume. Advertisers will flock to cheap clicks and publishers will give you a chance to improve. If they did this 3 years ago, they’d be much better off. And they would be stealing business from Google. Stop trying to roll out the perfect product. Just do it and damn the torpedoes already.
Yes, when will YPN accept foreign publishers? They are leaving a ton of money on the table this way.
As long as YPN stays in the US, most of the world’s webmasters have little interest in Yahoo’s success. Sure, Yahoo offers nice developer resources, but they’re not that hard to replicate.
@Marc has right point here. I don’t understand why they keep closing their ad platform. Publishers really want something other than Google’s ads
Nice read.
Can’t judge on the stay or go ending.
So who should be the leader of Yahoo?
Yang must go?????
who the fk are u to make that decision???
the ongoing saga of “Yang at the helm of Yahoo” has been covered by Mike here on TechCrunch for a while now, and as a technology pundit who is not afraid to express his well-considered opinion, he has arrived at the conclusion that Yang should depart to save Yahoo.
I’m not sure that they need their Barack Obama - comparing Yahoo to a secretive, corrupt government administration is a far stretch - but they certainly are an organization that needs focus and direction. They still have a chance to capitalize on their massive user-base and brand, but suffer from the problem that no-one can sum up what it is that they do - not even their CEO.
Yang is their Barack Obama. In a short time Obama will have the U.S. looking like the present day Yahoo. I thought I was voting for Brack from
Space Ghost.
Do you think he’s doing a good job? Koogle and Semel before him had a better performance record and they were let go. Why should he be exempt?
Dunno it could have something to do with him being one of the original founders of the company…
As someone stated earlier, the second you become a public company you no longer get a special exemption for poor performance. If you’re a private company, you can do anything you want.
Adsense is 1/3 of all Google revenues. The whole power of google is coming from advertisement revenues, seach and adsense.
Yahoo has a chance at least get 1/3 of that Adsense because everyone hates adsense and its monopoly. But for some reason Yahoo does not do that. Instead they lounch and shut down in the same year 3 different social networks. I guess they are just stupid, and they deserve what happened to them. Thats it.
Yes. Yahoo CAN, MUST and NEED to redefine Internet Search. Internet Search is over 10 years old and has relatively speaking NOT improved. Yahoogle did only one thing: Optimizing advertising dissemination on the Internet. But advertising is going down and will go down even faster. Search today is a pain in the…. Do we really still believe in “unstructured search”. NO - this is a nice option but not the future. Rearchitecting search in a way that searches find what they are looking for is the future of search and that future hasn’t began yet.
Yahoo like Google need to redefine their business. Yahoo has a huge advantage because they are smaller, theoretically more adaptive but lacking a vision, a leader that can translate that vision and an executive team that can execute that vision.
Yahoo needs to declare war to unstructured search.
Yahoo needs to build a technology that FINDS not SEARCHES
Yahoo needs to use new inventions like genetic computing
Yahoo needs to stand up and be explicit how they displace Google
Yahoo needs to think CeaseAdvertising.com
Yahoo needs to get people and businesses that want to be FOUND behind them
Yahoos new business model needs to be on finding things not searching things
This is all no rocket science it just needs some common sense and a truckload of boldness
Axel Schultze
really interesting points, but unless their is mind change nothing will happens!
your last point is not unlike your second one, axel. also, i think rocket science is exactly what yahoo needs. i’m sure they’ve said to themselves at some point - “gee, we need to be better at what we do”.
I really wish good luck to Yahoo! They got so much momentum, have still great services (Flickr, Upcoming, del.icio.us).
I am not sure that “Yahoo as a platform” will be successful (materials from YDN do not impress me at all) but this is still a very very good company with great attitude towards developers!
Good luck!
Agreed.
Have you seen the new home page fiasco at Yahoo’s Flickr? They took a site with an excellent, simple layout and they turned it to facebook! Users actually write scripts in order to make their way through the cluttered new home page.
They tried to resurrect Y! by bringing the founder back, following the example of Apple. There’s a big difference here. Yang is not a real founder. Indeed, a founder takes a serious personal risk. VC funding isolates so called “founders” from any real risk, except possibly loosing their comfortable salary. Steve Jobs was a real founder, they had no VC. These new VC -grown “founders” are completely helpless when they face real economic difficulty.
Wrong, Apple did take VC pretty early. They were smaller amounts in the 70s as the VC industry wasn’t as developed. Steve & Jerry are just very different people. Steve was able to grow into his role as a visionary leader and Jerry hit the ceiling at some point.
Not sure why this is even a debate. You can’t destroy this much shareholder value and destroy your negotiating power in the space of 11 months and still hold on to your job. If the board does not fire him they should rightfully be sued.
Internally — Yahoo! employees now openly discuss how many more weeks Jerry has before he gets his pink slip.
I am one of the many managers that have departed Yahoo! in the last few years– not because the company is in trouble, but because there are other opportunities that in the course of being at Yahoo, I’ve learned about and the company has prepared me for.
When any company gets to a certain size, this is what you’ll see happen. Even Google will get bureaucratic cruft and eventually lose the start-up feel. I’ve already seen the “cruisers” make it in.
Dennis
Good Luck Yahoo~~
Oh good god, I am getting really sick of hearing what a screwup Yang is. Why don’t the shareholders just force the board to dump him, find a replacement and move on.
I love Yahoo. Especially the nice graphics on the home page and the Yahoo logo. Im sure they will have many users soon and lots of people will probably use the email tool too.
I dont know much about this Jerry Yank you speak of but I like to use the site cos its got some message service that lets me keep up with my friends all day long. Thanks to Yahoo I always know what my friends are up too.
Its cool.
You forgot to add that you don’t even have to put a stamp on the mail you send! WOW!
Yahoo is dead already. Does it have good services & products? Certainly does, but I would lay my cards on M$ takeover agreement, otherwise how will Y get enough cash and musculature to compete against Google?
Microsoft should ressurect its takeover offer now, before Yahoo vanishes from the earth!
Will Y let the stocks fall to ashes? I doubt it…Yang is way too late to its final departure, that dumb face of not knowing what to do is a good argument for buying Y at $5 a share
Yahoo has what a giant needs to give a driving Kick start for its new big hit but what it lacks is the brain that thinks and relate to what users want. The bottom line is Execution THINK BIG, ACT SMALL, SCALE FAST
So he has to go, based on the value of his company’s stock? The company he founded?
He doesn’t have to go anywhere, friend. I’m cheering yahoo on, but yeah… they do need some help in the web services department.
You are the reasons so many founders suck as CEOs. Founders are not entitled to shit after you take shareholder money. They’re another cog in the wheel.
_d_ot
Buy a vowel. I recommend an “i”
The company ceased to be Yang’s company a LONG time ago. “Fiduciary responsibility” - look it up, look at Yahoo’s performance since Yang has been there, report back.
I still believe that Yahoo is the Internet Leader.
In a recent also, it has internet share of almost as that of Google.
So, Yahoo need not worry that much.
But, It should have clear vision in the deals going on with Microsoft and Google.
Also, I emphasize that Yahoo should and can stand alone.
>> Jimmy
Steve Jobs was clearly a better CEO if compared to Yang, yet he was fired from Apple! The only difference is that Jobs came back and indeed put Apple back on the rails… Being a founder doesnt mean much if you cant inspire your employees, if you lose the catch, and thats what Y has long lost…I am absolutely sure Microsoft is the only solution for Y; I dont work at M$ and i am not an unconditional supporter, but you must agree they refusal for $ a share was way too stupíd, specially considering this tons of cash is exactly what they really need now! Cash brings minds, and minds turn ideas into cash…you dont have, pfff, your death is right there, just waiting for you, and thats where Y2 (Yahoo + Yang) is at this moment.
Hey Mike. what about stock price tomorrow?. you think it will reach 11 dlls?. unless a miracle happens it could very well end up at 10 dlls next monday.
Many root for Yahoo. i understand it. i liked Yahoo. but history should be noted and see how Yahoo had 3 opportunities to stop Google from being what it is today and how it also had other big opportunities to buy and make partnerships that would have transformed the company into something else but into something that would have endured.
Even if Yahoo announced tomorrow they have open sourced everything, got a all or nothing plan and a new CEO. they lack time of execution. Yahoo is a great company with some great assets that are now worth more broken down than together.
So. even if they got a new CEO. they have burned down most of the internal power structure. they don`t have a Advertising initiative that can be launched in less than 3 months and the product and services rethinking needed to make Yahoo work would take no less than 6 months to turn around things and that is with a perfect execution.
So the question really is:
Yahoo got enough time left for this to happen alone?
I say no. this is extremely unlikely in the state it is now. i say no less than 90% unlikely. if left alone. yahoo would simply erode and collapse under its own weight within 6-9 months.
a Yahoo-AOL merger would work?.
There is a good chance.
AOL got a better advertising platform and network but they lack search marketshare. they got a good social network (bebo) and together they would be totally dominant in E-mail, IM and on Internet Portals or Destination Sites.
It can work. just not on Jerry Yang hands. otherwise what would be the point of it?.
Much kind of yahoo service still growing up … ..Bravo Yahoo
Do you … er… Yahoo?
Yahoooooooooooooo
Good Luck To Yahoooooooooooooooooooo……………….
The Yahoo answer is pretty simple, Yahoo needs to move away from portal strategy to vertical strategy. Yahoo needs to rebrand its products with their own names away from the umbrella Yahoo brand. Just like how Flickr is a great product and brand in it’s own right, other products should be spun out under their own name. Bundle that with a common login & friend’s list and you have something very powerful happening in terms of adoption.
Also Jerry is sounding a bit Web 1.0 and is not clued onto the the latest evolution of the web and does not seem to be able to drive that.
It’s notorious the lack of leadership. Yahoo is still the major world reference when it comes to web portals and services, but the lack of direction and focus is prejudicing a lot the company. Jerry Yang should know better and don’t demonstrate that difficulty on public.
Totally agreed with Rui, “lost direction” and “demonstrate that difficulty on public”. It would make shareholders and employees really worry.
It seems that they are attacking Jerry too much. He is under a huge pressure. At any way, Jerry is just a person in a Y! organization, he may not be the best, not successful, but we can’t judge the whole company by digging a failure of an individual. More than that, Y! is still one of the most popular website all over the world. We can deny that, a new strategy may be necessary at this time for the big Y.
What you also have to consier is the fact that I would reckon, well over 90% of yahoo users are completely oblivious to Yahoo’s current market slump, seemingly poor leadership and the boardroom turmoil over which Yang has presided. And all because he wouldn’t sell out to Microsoft. I’ve got to give kudos to Yang for having the balls to turn that deal down then stay at the helm while the roof came down on top of him. When the dust settles, Yahoo will sill have it’s users and I have no reason to believe that when all these embittered investors get off his back he can bring Yahoo back to the forefront as a pioneering company. After all, he’s done it before. You can give the guy as much flak as you like but one thing is for sure, he won’t be pressurised into selling out. He has integrity and his general, what might be seen as ’stubborness’ throughout this whole hoohaa, is part of the reason Yahoo became the company it is. Go get ‘em Jerry.
@Ray — Ditto. All the wannabes here, including Arrington, like stinky chihuahuas that keep yapping at *real, successful* entrepreneurs like Jerry Yang, know that they would never, ever be like them… or accomplish what they have done.
BTW, Mike, where do you get that Yang is “poor”? I would say that his “poverty” amounts to many, many, many times what your worth is…
Arrington posts all new stories on twitter under his name, but is anyone else, like me, able to successfully guess who wrote a specific article just by the title?
When I saw the title of this story it had an Arrington nature about it.
http://finance.google.com/fina.....ASDAQ:YHOO
Why is their stock price rebounding then?
http://www.thestreet.com/story.....;cm_ite=NA
Oh wait, that’s why.
Just in case anybody is too lazy to click on the link
“Yahoo! CEO Ready to Resume Microsoft Talks”
And this is why “The Street” is a market source on TD Ameritrade, and TechCrunch isn’t.
…and you should replace him
Hehe, i cannot think of a worse thing for Yahoo to do than get rid of its founder. Trust the man that built the business into what it is today, the most trafficked web property in the world.
Yeah - he did his part. He built it up. Mostly because he was simply at the right place at the right time. If he hadn’t made Yahoo someone else would have made another web portal in the 90s.
He just doesn’t seem like a good leader. I understand he doesn’t like the idea of selling his “baby” to the man “Microsoft” but he has lost the company, it shareholders and workers billions and billions. Isn’t that a sign in and of itself that he clearly is no longer making good business decisions at any level?
Scott, well put, seems like most people don’t realize/comprehend the first point you made.
At least, YAHOO still likes peanut butter!
No but seriously, they are behind some awesome things for the web, like YUI etc.
http://biz.yahoo.com/rb/081106......html?.v=2
Looks like Yang is capitulating.
Honestly, I’m sorry to say this - but this post strikes me as inappropriate and perhaps a bit arrogant.
While Yahoo! indeed has major problems, changes don’t occur in six months. Yahoo! isn’t standing still, it is making moves - but it takes more time than that for results to materialize.
If such a bold (and to the person involved, I dare say - downright offensive) post is released to the world, where is the data to back it up? Where are the facts?
Is it share value?
Well, things have happened in the stock market in the last 6 months, as you may know. GOOG has lost over 42% of its value in the last 6 months, do GOOG leaders have to go home as well?
The other factors mentioned wouldn’t stand by themselves to justify the conclusion.
This is an unfair post. Please brings us real facts, not careless judgments.
Itamar, you’re completely missing the point.
1) Yang could have cashed out at the top unlike other companies. He had a bird in the hand but opted for 2 in the bush. He’s as foolish as folks who held tech stocks through 1999 only to ride the elevator right back down from 2000-2003. If Yahoo had an offer to get bought for $100/share in Jan 2000 but passed time would prove them to be fools, regardless of what happens to competitors. What happened over the last 8 months is a similar situation.
Yahoo management will be remembered for THE blunder of recent times. This will be remembered just as Broadcast.com is remembered for bilking Yahoo out of $5 billion back in the hayday…or about 25% of Yahoo’s current market cap.
Nancy,
You’re hitting the exact issue.
Yang is a founder and CEO. He should be looking long term. He shouldn’t be looking for the exact best moment to “cash out”, but instead - at how can the company generate value for its shareholders and employees for the long term.
You aren’t expecting the CEOs of other companies to do their best to cash out at the highest value. Why would you expect this from Yang?
Yahoo! is NOT out of options for independent, profitable existence. Bad times occur to any company, and the good ones survive them to emerge as better companies.
You’re completely off base and time will be the ultimate judge. If Yahoo is worth more than $50 billion within 2-3 years, kudos to Yang. He’ll be a big winner.
The potential upside from a present value of MS’s $44 billion offer, however, is quite small in my view. The threat of inflation, access to capital and other macro trends highlights Yahoo’s hubris in thinking they’ll create value in excess of the MSFT offer. To turn down cash in hand was very foolish. So far, time is proving my POV correct as Yahoo has dropped to $20 billion.
Again, time will tell. Let’s revisit this conversation in 2011…
Heck, if Yang could have sold the company at $100/share in 2000 he would be a GENIUS. Just because a company can “exist independently and profitably” on an ongoing basis does NOT mean they shouldn’t sell when their price has peaked.
And you geeks wonder why VCs play most of you guys….
Indeed, time will tell. If Yang is able to generate solid growth for the long term - then, by definition, YHOO’s price have not peaked.
It all comes down to school of thought, though. A true company leader cannot be guided solely by the short-term stock performance. That is not the way to create excess value. Companies such as AAPL demonstrate this fact easily enough.
Am I saying that Yang will definitely succeed in such an undertaking?
No. I simply don’t know. What I’m saying is - share value isn’t the proof he can’t. If someone says he can’t - great, but please give us some facts.
You mention some notable factors, but those aren’t the make-or-break factors for Yahoo!’s long term future. We’ll have to wait and see - if at all Yang stands the pressure and stays long enough to show us.
“And you geeks wonder why VCs play most of you guys….”
WIN
I agree with Itamar — he has good points and more importantly he points out Arrington’s arrogance.
It’s almost like there is something personal going on with techcrunch and yahoo — or maybe just wanting attention via shock journalism…
Just a lot of envy, plus the belief that “controversial” is “good journalism” that would bring more traffic to TC.
Don’t forget that Arrington is “cultivating” TC for a possible buy out… by. I don’t know, by Disney?
i think yahoo is a great site with very good apps - what makes me mad is their level of service that dropped down lately, no or late reply to emails, 30 minutes on the phone before you can talk to anyone there.
my comments at http://www.commentino.com/orim
It’s simple. Yahoo is the #1 web property in terms of traffic. The revenues will be flat in 2009. Fire 4,000 employees and fire 2 entire layers of management. Traffic won’t change and neither will revenues. The bottom line will get the savings. Be ruthless, Jerry. You don’t need any vision, just maximize profits.
DingDingDing! We have a winna!
that’s exactly the correct strategy. i was at Y! when there were only a few hundred employees. one person did the work of what now takes 10 people. there was more innovation because everybody was too busy with their own properties to interfere with someone else’s vision. there are too many layers of management and too little freedom to be really creative. if Y! employees feel ownership again they will bring the company into the future. jerry is a great guy; smart, original and he’s not a one-trick pony. he needs to move on and feel innovative himself instead of being so insular. jerry should step back and leave running the company to someone else. only then can reignite his own passion and look to the future without being bogged down by the present.
Yahoo will rise like the phoenix from the ashes!
Yahoo! should be saved because of its involvement in important open source projects like php, mysql and many apache projects and also for its support to Wikipedia
http://meta.wikimedia.org/wiki/Yahoo!_hosting
giving the company away or selling it to MS would mean a slowdown on open source evolution, not good. and by the way, between Y and Google I think the less evil of the two is actually the former.
Actually, Yahoo already has their Barack Obama… someone who says he knows what to do but is in way over his head.
Zing!
But seriously, at least Obama has people excited. Everyone except anyone invests in any company that is. I thought the stock market was supposed to stabilize after the election? 5% yesterday and another 2% so far today…
@Jim C
Absolutely, and he knows it. I hope that Joe Biden was just talking around his foot on his mouth when he mentioned the “major international” challenge for Obama in the near future: European intel reveals an imminent Israeli strike on Iran’s nuclear facilites before the “decider” leaves office because the US would not intervene or protect Israel for that matter after January.
Obama would not do anything to protect either the US or our allies. Oh! I am sorry: he actually would invite the bad guys to tea in the White House to “talk it over”
Yahoo will be dead. Yang is a loser
I think Yahoo is undervalued. The thing is ppl who is holding yahoo’s stock don’t represent loyal Yahoo users. It’s still the most popular website and the brand itself worth a lot.
If it were not MS, Yahoo would be fine and on a solid path now. If Yahoo is destroyed, it will be a real tragic, caused by MS, not Jerry. Having more power/$$$ doesn’t mean MS could (in an ethical way) intervene other business with their financial power (pressing shareholders and ugly things).
Most of Yahoo’s users don’t play the market much…
I really think Mr. Yang is making the wrong move, Microsoft would buy Yahoo.
Juan Saldivar
http://www.nushio.com/
Is it just me or does Jerry Yang look like he has Down Syndrome?
@coolnalu Don’t confuse loyalty with investment. If one continue to loose money, one will not be loyal much longer.
Remember, we are dealing with FREE services. Loyalty does not bring $ to Yahoo, unlike loyalty to product brand. Every time a loyal customer picks up the product on the shelf, the company makes $. In the case of Yahoo, the loyal customers have to click on the ads. Do you, as a loyal user of Yahoo, click on the ads? The problem facing Yahoo is they have a lot of loyal “free” users, but they are unable to monetize their visits. IMHO, they were too focused on media. They failed to increase the relevancy of their ads.
The ’shareholder value destruction’ element of this argument is weak. Over the last year Steve Jobs has presided over $80Billion in stock value disappearing from Apple — is he 4X worse than Yang?
It’s whether Yahoo can put out products and services that galvanize people, and whether Yang is the guy that can lead Yahoo to do that. That should be the focus of the discussion, not some dubious market angle.
I’d guess Murdoch will be back and take them over…
I don’t agree with what has been said over here. Internet search advertising can not be simply run by Google alone. Yahoo and MS will have to come up and take some share away from Google.
i agree with neeta