Perspective: Yahoo blows its big chance

Meet the new boss. He's a lot like the old boss. In fact, he is the old boss.

The chorus baying for Yahoo CEO Terry Semel's scalp finally got what it wanted. After underwhelming the only reviewers who really matter these days, the MBAs on Wall Street, the (now very wealthy) Hollywood guy gets to wave goodbye to Silicon Valley's geeks and return to hang with his old showbiz buddies in Bel Air.

But as much as the financial mandarins hated Semel, Wall Street may well rue the day Yahoo put Jerry Yang back in charge. More about that in a moment.

Semel's been in hot water for most of the last year. It seems hardly a week would pass before some Wall Street hotshot or self-important columnist (no resemblance to yours truly, I swear!) would issue a call for a shakeup in the executive offices of Yahoo. Dump Semel, they said, and put a technologist in charge. The sooner the better.

The problem for Yahoo is that Yang's about as exciting as melting vanilla ice cream on a hot summer's day.

Their bill of particulars? It varied, but the thrust of the indictment was that Yahoo ain't Google. No news there, folks. Critics did have ample fodder with which to attack Semel, starting with the baffling delay of the Panama search advertising platform. They could also fault Semel for any number of management screwups that convinced talented senior executives to bolt from the company.

And then there was that $71.7 million pay package in 2006--part of what amounted to nearly $450 million raked in since his appointment as chief executive in 2001. (Who says America's not a great country? According to the Associated Press, Semel's take last year was bigger than any of the CEOs running the 386 public companies it tracked in an analysis of executive compensation.)

But the dumbest thing Yahoo could have done was to let "Google envy" panic the company into making abrupt management shifts. Truth be told, I misread the tea leaves. Semel clearly was living on borrowed time--especially after his circle-the-wagons performance last week at the annual shareholder's meeting. Until now, though, I thought the board was stalling while headhunters conducted a quiet search. What superstar CEO wouldn't covet the opportunity to lead Yahoo out of the wilderness?

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Just shows how little I understood about the dynamics inside Yahoo. Instead of aiming high, the board settled for what was safe and familiar.

Like most of the digital wunderkind who made it big during the dot-com gold rush, Yang was feted for his business acumen as well as for his technology chops. After all, you don't become a billionaire at 29 by luck. Or do you? Yahoo was an envied company in the late 1990s when the Internet was still in its go-go phase. But when the Internet bubble popped, the Yahoo mystique evaporated.

After the economy went into the tank, Yahoo struggled. No matter what management tried, Yahoo failed to stanch a staggering drop in online advertising revenue. Suddenly, Yang looked more like a deer in the headlights than the second coming of Bill Gates.

And lest we forget, Yang--along with co-founder David Filo--was one of the management goobers (along with former CEO Tim Koogle) who signed off on the insane idea of buying Broadcast.com for about $5 billion. (The bigger sin is that the acquisition condemned NBA fans to a lifetime of watching Marc Cuban make an ass of himself on the sidelines berating basketball referees.) The less said about Yahoo's equally baffling $2.8 billion purchase of GeoCities, the better.

Not that Yang's a bad guy. To be sure, he has a blind spot when it comes to Internet freedom and China. Then again, so do a lot of his brethren in the technology industry. The problem for Yahoo is that Yang's about as exciting as melting vanilla ice cream on a hot summer's day.

Droning on about the management changes at Yahoo during a teleconference Monday, Yang sounded like a male version of the Stepford Wives. Rumor has it that indeed his pulse was working, though you could have fooled the listeners. At any moment I expected a Yahoo PR handler to whack him in the head to coax even a trace of emotion. Opening-day jitters or a sneak peek of coming attractions? Hard to know just yet.

But if Yang can't muster the fire to rally the troops up the hill--and it is a steep one--Yahoo should save everyone the trouble and e-mail the terms of surrender to Google.

Biography
Charles Cooper is CNET News.com's executive editor of commentary.

More Perspectives

[t8]

Yahoo could sell to Google

Once Yahoo had the opportunity to buy or fund Google, but they refused.

Now Google could buy them. But then why would they do that?

[n3td3v]

Change the Yahoo search engine back to Google!

Change the search engine back to Google, that is what "surrender" means and something you should do fast to save the sinking battle ship of Yahoo Inc.

[Emilio2000]

No way! Google stumbles in search.

I've been comparing Google and Yahoo searches for the last couple of years, and I am much happier with Yahoo's results!

There are many things you simply couldn't find on Google, because they bury it on page 37 of the search results. Meanwhile, Yahoo was always able to find what I was looking for, .. and right there on page 1.

Besides, Yahoo doesn't make webmasters jump throguh all kinds of hoops to make their web sites acceptable, like Google does. Yahoo simply finds things, the way it's supposed to. I'll never understand why people are so eager to dance to Google's tune, even though Google keeps changing the rules on us all the time.

You can have Google if you want to, and you can remain a slave to its ever-changing whims. I'll stay with Yahoo, thank you very much!

[hutchike]

Microsoft will buy Yahoo soon

No matter how bad Yahoo might be, Microsoft's MSN unit is way way worse. For example Hotmail - what a wasted opportunity! But, Microsoft has a wallet full of folding stuff, and would be wise to buy Yahoo! to fill in the obvious gaps in its own online portfolio. Since the loss of Doubleclick to Google, Microsoft's only option to learn about browsing habits (and hence monetize traffic) appears to be Yahoo. Fundamentally only Overture (Yahoo Search Marketing) and Google Adwords have patent rights for biddable PPC - Microsoft is between a rock and a hard place. I predict Microsoft will buy Yahoo for $50bn in equity (less than 20% of its valuation) before the end of 2008.

[djpaisley]

yahoo! back to basics

well since jerry invented the search engine/directory.. he should be able to fix it... if he gets back to the core business of search then yahoo! can move forward... i think it's their best chance... i mean how did Google kick their ass? By becoming the number one search engine.... which is what yahoo! was with their directory and webcrawler as their index....

[MissionX]

Yahoo Could WIN GOOGLE Easily If they know how !

Hehe no comment if you want comment u must hire me. Every Business do have pros and cons.

To defeat your enemy you must know their weakness !

Nothing is difficult and nothing is easy too.

If jerry don't know how to win ask him to ask me

Hahahaahh

[Pixelstuff]

... if they know how.

We could also travel to the stars in our lifetime if we knew how.

[iBuzz]

The web would suck without Yahoo!

...and it would suck without Google too.

I guess I just don't get it. Why is everyone looking for a "Yahoo! vs. Google" battle?

I use both. I use Google for search and Yahoo! for just about everything else (email, movie times, TV listings, sports scores, weather, news, etc.). And when I can't find something using Google search, it's nice to have a second place to go like Yahoo!

Why is everyone coming down so hard on Yahoo?

[t8]

Because Yahoo should be where Google is now

That is the reason for the criticism.

[thunderway]

the way of the world

Yahoo isn't a failure, but shareholders (read: LARGE shareholders) demand a high return on their investment. Not a bad thing, as it tends to keep the pressure on management to produce ( though many private companies are very successful without the distraction of shareholders). The downside is the often short-term focus on gains. If a CEO can ignore short-term pressure and can execute a few really good ideas, s/he will win big. There lies the failure in this case.

[chrizz1971]

Then again, much hope was thrown at Carly and look what happened.

I remember a few years ago when Carly Fiorina took over the reins of HP and media like this hailed her as HP's salvation.

Look what happened to her.

'Nuff said.

[oxtail01]

another brain-dead article

It's been well documented that a well run company is not because of a "exciting" leader. Yeah right, we need exciting CEOs like Skilling and Kowsloski and countless others now doing time behind bars. If you knew so much about management, what the hell are you doing writing for a second rate outfit like CNET?

[fire1fl]

Yahoo has its own best example how to claw

back toward, if not to, the top.

[fire1fl]

Sorry - premature <ret>... but

my previous post intended to say that flickr, as purchased by Yahoo, is the model for how to take over a niche. I'm not sure it's worth cash to Yahoo, but the evolution of flickr (or at least their own story of how it evolved) is the ideal model - respecting the users, letting them make "the rules", treating users as adults - even those who aren't, and adding features that make sense as they are suggested by the user/community. It's a combination of the social network, source of great pictures (many of which are made available by the owners for public use), and learning experience from the pro's. There could be similar sites for many interest groups that operate on that model.

[jesmac418]

Yahoo looking for second wind

It seems the problem with every company these days. Is that if it
does not see double digit growth every year it must be doing
something wrong! Not everyone will like Yahoo, Google, MSN, or
anyone else for that matter. In fact people tend to jump around
like rabbits these day's. Google still does one thing really well
and that's searching the web. Of couse they have had some
success with other things, but in the end it's still searching that
comes to mind. Why is it that one really good product is not
enough anymore? You know AOL went through the same phase
that Yahoo is going through. They never realized that people
really are not that loyal anymore. When the next best thing
comes along, their gone!!

[slwilkie]

Mr Charles Cooper

Unreadable.

[Millerboy]

Yahoo & CNET

Yahoo should buy CNET. They're a perfect team. You combine an internet portal like Yahoo,

which draws the most traffic, with a media content generator like CNET and it's a win-win for

both.

CNET owns Gamespot (video games), TV.com (television), mp3.com (music), GameFAQs

(user-generated gaming advice), FilmSpot, download.com , and more.

This is what Yahoo has been looking for, they get to expand their media empire with video

games, TV, music, films, downloads, and more.

This combination is staring Yahoo right in the eye. Don't drop the ball again, Yahoo. If

Yahoo doesn't acquire CNET, then some other media company will eventually. The new CEO Jerry

Yang has to really be blind to miss this once in a lifetime opportunity.

[niravabhavsar]

Turnaround cnet

How is cnet going to turn around? they have lost more money than yahoo!. One step to cnet turn around.
1. Sell it to yahoo! - that is the only good serice cnet can do for its shareholders.
I love yahoo! and for years MyYahoo.com has been my browser startup page; I pay to use Yahoo enhanced email; I have over 2500 photos on Flickr ; I find Yahoo Finance to be almost as good as Bloomberg but without the $1800 a month price tag; I have even been using Yahoo's search recently and find it so greatly improved that I don't need Google as much. I have registered websites using Yahoo. I use Yahoo! Go and OneSearch. I connect with my friends and family using yahoo messenger only. I love yahoo pipes. I use that to pull news via rss feeds to my yahoo page. Yahoo simply rocks......

[nicmart]

Not another Mac-centric comment!

I usually hate them, but this time I'll make one.

Yahoo's lousy attitude toward consumers is symbolized by the
way it perpetually thumbs its nose at Mac users. Google has
some Windows-only products, but it does a pretty good job of
embracing a platform-independent approach. I was a premium
Yahoo Mail user for years (which is to say that I paid them
money), but they made life so unpleasant (and still do) for Mac
users that I finally relgated Yahoo to the dustbin of history.
Aside from accidentally stumbling onto the search page, why
would anyone make the effort to bring up Yahoo for a web
search? What special value does it offer?

[chatangel]

All I want to know is

for us non-geeky type Internet users, how is all this going to affect the AVERAGE JOE Yahoo user?

[Fil0403]

All I need to say is

in no way.