IndustryYahoo’s Next Move

Yahoo's Next Move

While many onlookers see Jerry Yang's tenure as CEO of Yahoo as a failure, that's not really accurate. He stepped in to rebuild a floundering machine, and is now making way for the next evolution of the world's most powerful portal.

Jerry’s Yang’s announced departure from the helm at Yahoo has inspired quite a bit more speculation than the last round of search-inspired hijinks. Google, Yahoo, and Microsoft top the minds of searchers everywhere, but we haven’t seen a sane-looking move come out of the search business since text ads started appearing in search results.

The man who had little time to improve a very bad management situation has been unfairly judged by an overcritical press, an under-informed group of analysts, and a cacophony of naysayers.

Change is in the air for Yahoo, but the word that used to define the Internet for millions of searchers has a lot of work to do before it gets back on track. Changing leaders, better monetization, and strong partnership are in order for the ailing search giant.

Bring Back the Talent

When Microsoft has a corporate all-hands meeting, Steve Ballmer‘s passion and excitement is tangible. Inspiring leadership is the cornerstone of motivating and rallying the troops. Many Yahooligans have felt for some time that Yahoo is severely lacking in this department.

Say what you will about Terry Semel, but he had the chops to get people going. While he arguably left the place with quite a mess for Yang to clean up, people got excited when the man stood before the troops in the all-hands rally format.

Following a plummeting stock price, the leadership team exodus became inevitable. As with any company facing unrealistic scrutiny, many senior managers found themselves with a whole lot of stock that couldn’t possibly hit the price they were offered. Yahoo’s fate was sealed the moment it began managing exclusively by the bottom line.

What’s Really Wrong?

A lot of companies are making the management-by-numbers mistake in our struggling economy. Close scrutiny of the figures and managing by the bottom line instead of what’s best for the business long-term will always leave a company with a smart-looking cash flow and absolutely no leadership or strategic direction. But who cares about thought leadership and strategic direction?

At its core, there really isn’t anything wrong with Yahoo. I know I’ve said this many times before, but Yahoo’s strengths still lie in its ability to reach out to a massive audience. As is often the case when the original management team exercises its stock options and exits, the void left by this exodus is never really filled.

While speculation about a replacement CEO continues, and analysts persist with pointing out that Yahoo’s market cap went from $40 billion to $16 billion with Yang at the helm, no one seems to want to admit that charismatic leadership combined with subject-matter-specific knowledge is needed here.

I’d take the gig, but I already have a plan for the next two years or so.

Yahoo was arguably swirling the bowl before Yang took on the CEO role, and mark my words: a panicked board installing a doormat leader will have Yahoo stock trading by the penny in no time flat.

No Way to Go Out

At the risk of getting all misty-eyed and sappy, the Internet world owes Yang and David Filo a tremendous debt of gratitude. Thousands of search marketing, Internet advertising, marketing, and technology trade professionals would be washing windows, flipping burgers, or sitting in cubicles reading TPS reports had it not been for the actions of these two men.

Those of us who entered the business of search owe Yang a special thanks. Sure, we can second-guess the Microsoft acquisition and argue (as I have many times) that the deal simply came down a battle of egos, but that’s not how the world should remember this chief executive.

Though Yang will stay on as Chief Yahoo, his presence at the immediate helm of Yahoo should be noted as beginning with a solid foundation, followed by stepping back in to rebuild a floundering machine, ending with move to make way for the next evolution of the world’s most powerful portal.

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