Yahoo: Digital Punching Bag of the Week


Even when there is no particular news of note, opinions can get heated about our dear old friend Yahoo.

Should Yahoo and AOL merge, so they can do a better job of being digital age media companies facilitated by technology? Henry Blodget thinks so (without rancor), and has been saying so for years. We at Traffick also argued for a Yahoo-AOL merger 2.5 years ago.

Beyond pockets of support, there is mostly negativity for Yahoo in the press and blogosphere. Yet last week, I pointed out that from a strictly financial standpoint, and based on other objective measures, Yahoo looks like it has weathered many storms relatively intact. It’s not Silicon Valley cool, it has too many executives (even when bunches of them “depart,” supposedly leaving a “void” in the company), and it definitely isn’t Google. Those are known knowns, and yet the blog commenters keep piling on. The taunts, however, are largely subjective.

Take Yahoo-bashing ringleader Michael Arrington’s gratuitous rumormongering about the supposed unwillingness of the Yelp management team to take $750 million to wind up working at – ugh! – Yahoo, instead of Google. Yet if Google’s $550 million offer was so great, they’d already be working there. More likely, both offers would have dried up in the middle of due diligence, based on question marks about Yelp’s financial performance. It’s just as likely that all offers on the table were heavy on earn-out responsibilities. The avalanche of anti-Yahoo comments on Techcrunch don’t necessarily reflect Yahoo’s business prospects or user base’s tastes, any more than most of us digerati could make sense of why AOL was so strong for so long.

Pro-Google journalist Kara Swisher spun this week’s “wave of executive departures” at Yahoo with a banner headline screaming that it was a “major meltdown” for the company. Hmm, really? Or it could be a major cost saving.

To make sure we got the point, Swisher followed up with this whirlwind of invective somehow masquerading as journalism:

Um, we are deep in the second year of the Bartz regime, and there appears to be no iPod-like save in sight, and it’s a little long in the tooth to keep using the turnaround excuse for all that has not yet happened under her command.”

“Which is to say, stock with a pulse and real growth across all metrics, as Facebook and Google (GOOG), to name a few, are showing.

“In addition, it was Bartz herself who handed over a lot of the responsibility for the revival of Yahoo to Schneider.”

1. Huh? Did Carole Bartz promise to roll out an iPod-like second coming for Yahoo?

2. Well, handing that much responsibility “over to Schneider” must have been a bad idea!

Anyway… I’ve always found that the majority of journalists focus far more on executive moves than most practitioners. Executives are people who do lunch; business models are boring. Yet when business models that scale massively are already all but built, are any but a handful of executives truly indispensable?

To be sure, many of us have often asked ourselves why Yahoo does seem to have such a revolving door of high paid top management and middle management jobs. Certainly it has operated much akin to the political changing of the guard under a new presidential administration, with housecleanings taking place to reflect new priorities and management styles once a new CEO takes the helm — and Yahoo has had too many CEO’s in the past decade.

But might it also be that you can boil it down to the fact that second-tier, overpaid executive type people really like money and the security it can buy, but they don’t completely like the jobs they have to work at to get that money? If you pay them enough to be semi-retired after five years (especially with a buyout package provision that gives them an incentive *not* to perform at their best), chances are they just might feel secure enough to go try something new and different… or just easier. Many former Yahoo execs go onto startups — not out of greed, but out of boredom. That calculation might be different if they needed to stay with the mother ship a few years longer to build up that cushiony nest egg.

Internally, and in terms of recruiting talent, Yahoo’s challenge is certainly to find some new-found mission it can be passionate about, so fewer people get bored. But it’s all relative! Bored, compared to where? Out there in “corporateville,” there are worse gigs. Far worse. Paying much less. With much more frustrating challenges. Yahoo is OK, compared to a lot of companies. Just not compared with how some people perceive life to be at Google, Facebook, LinkedIn, or Twitter.

More to come on this. My next post on this is entitled “Yahoo: The ‘Sloan’ of the Digital Age?”

Stay tuned.

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