Yahoo natives abandoning ship

Executive turnover is a fact of corporate life, but Yahoo is treading on dangerous ground with the number of key executives who are abandoning ship (see Techmeme).

Yahoo isn't a sinking ship, but it is beginning to list prominently, further calling into question the captain's piloting and leadership skills. The executive exodus is a tacit rejection of the current leadership and the board.

The executives who resigned are carrying a lot of expertise and institutional knowledge out the door. Some have grown tired of the ongoing battle and uncertainty over Yahoo's future and some are not enamored of the impending major reorganization.

Since Microsoft walked away from the negotiating table in May, Yahoo has been in a tailspin, with shareholder suits (mutiny), a skeptical Wall Street, a hounding press and now the very public resignations of key people.

So far Yahoo has not publicly addressed the executive exodus or outlined the reorganization of the company. It's getting more clear that CEO Jerry Yang and President Sue Decker are treading water. Even if they have the vision, smarts, and passion to right the ship, in this situation someone is usually given up to appease the gods of the business underworld. As I wrote previously, Yang bleeds Yahoo purple, his purple blood is in the water, and the sharks are circling.

The question is who would be ideal to take over the ship, rally the troops and deliver competitive products if Yang stepped down as CEO. Decker may be too tainted from the last several months of upheaval. But what outsider would want to take over the company when Carl Icahn and Yahoo's board are fighting for control of the company. And, if Icahn's group manages to get control of the board, would a new CEO just be present to break up the company so the anxious shareholders can take their money and run?

Unfortunately, this latest chapter in Yahoo's brief but impressive history has been just about the money. It would be far more interesting and potentially beneficial to its 500 million users if Yahoo's team were able to focus on building products.

Yahoo issued a statement this afternoon addressing the series of departures:

"We have a deep and talented management team across all areas of the company. Our successful implementation of our core strategies and the timely rollout of key products this year testifies to the effectiveness of our team, and we continue to recruit outstanding talent. Yahoo continues to be a leader in our industry and remains a unique, exciting, and important place to work even as we experience the attrition that's to be expected in the Internet industry."

The reality is that the deep bench of talent is getting thinner by the day, and it's becoming more difficult to recruit outstanding talent under the current circumstances.

[andrew.mager]

Excellent post.

I love the graphic too!

I think it was childish for yahoo to rebuff the offer from MS. When executive's ego takes front seat, business takes back seat and not a lot of people are ready for the rough ride sitting in the back seat.

[premchandj]

Yahoo is the best example, of what wall street can do to a good company, by looking at it as a 'stock price', rather than a bunch of talented engineers, who can/could change the world. Don't blame Jerry. The onus is upon greedy investors who don't care about the company. Given that, it is no surprise that folks don't want to put up with such a irrational investor crowd.

[kartbart]

Premchandj: This is not Wall Street's doing. When a company decides to go public and reap the benefits of investor's money, it is answerable and accountable to its investors and it exists for the purpose of making money for the investors. So either take Wall Street's money and play by the rules or stay public.

Wall street is not being unreasonable here. Mention one innovative thing in the sea of innovations in the last 5 years that came directly out of Yahoo!

[kartbart]

Premchandj: This is not Wall Street's doing. When a company decides to go public and reap the benefits of investor's money, it is answerable and accountable to its investors and it exists for the purpose of making money for the investors. So either take Wall Street's money and play by the rules or stay public.

Wall street is not being unreasonable here. Mention one innovative thing in the sea of innovations in the last 5 years that came directly out of Yahoo!

[telestarnext]

premchandj : obviously you don't invest. My money works for me, I DO NOT work for my money. Microsoft, Yahoo , Sun, IBM, Cisco are all just relevant to the % I get on my return. Yahoo has been dead for a while now. Stop the yahooligans and lets get on with it.

[johnsin]

The day I walk into work and find the headline "Jerry Yang is Out" on News.com is the day Yahoo starts down the right path. It's sad to see such long-standing company with so many talented people just sit there and spinning. Reminds me of my experience working for the major labels. I can imagine the daily frustration of a Yahoo employee. A load of good ideas, and promising projects, but with now real support or direction from the executive branch. I am sure the employees at Yahoo have a tremendous amount of creativity to come up with the next killer web app.. or even a combination mashup of the current properties to make something compelling. It's unfortunate that the executive head of the company isn't in sync with the employees and developers; and they won't be until they can stop spending all their time trying to save themselves (protect their egos). The executives need to get back to what they should be doing. Supporting the innovation of their employees and not spending so much time trying to save their own behinds. Plus, Jerry Yang is just a horrible figurehead. He just looks like a big idiot in every picture I see.

[~Neo~]

Can anyone say YahTanic, saw this coming months ago, Yahoo better find a suitable company to take it over or it's history.

[Idyot]

I still contend that Microsoft doesn't want Yahoo as much it wanted to create a rift - or if it can get away with it, a void - in the search engine business, that it can fill. Think of the cost savings if Yahoo goes down without Microsoft having to spend a dollar on acquiring it.

[make_or_break]

Always with the conspiracies. You give Redmond WAY too much credit for thinking creatively, particularly with Ballmer at the helm.

[Bill_I]

All this reminds me of Netscape after AOL bought it. Netscapees crowded the coffee shops using their new Wi-fi computers trying to invent the next new, new thing. We are lucky that the phoenix (Firefox) arose from the ashes.

[cparente]

Does look bad for sure, but I find all the reporting incredibly uniform and getting personal. Amazing how tech bloggers justify their disgust by protraying themselves as defenders of shareholder rights.

Blogged on this at http://cparente.wordpress.com

[flickrz]

Most of the bloggers who are defending share holders rights have a say in that. But, you also have to understand that there is always a time for a company when everything is not going well for them. It is not like that Yahoo doesn't generate profits anymore. It still makes more than 1 billion dollars in profit every year. It would be unfair to compare them with Netscape or any other company also. They still are the top destination for portal, news, finance, photos, mail and messenger (according to 3rd party measurement company ComScore). Most of the commentators are blinding by onslaught by the media on Yahoo!. May be you guys should first read this (http://searchengineland.com/080620-094239.php) penned by Danny Sullivan.

[make_or_break]

Yet how long will that profitability last, if Google continues to rip market share away from EVERYONE else, including Yahoo? Investors expect significant gains for that money that they pour into a company. A simple profit isn't good enough, not when others are attaining double-digit or even triple-digit growth rates. If that greener grass is elsewhere, then investors will invariably walk...and Yahoo will have missed the seat and stuffed itself straight into the toilet bowl.