Yahoo Keeps Creating its Own Troubles

Yahoo is having a spin problem lately. It’s going through some changes, as everyone is well aware. Finding a way to keep and build its search share and build out its display ads and other properties in the face of growing competition is enough of a challenge. But a bigger problem may be its propensity to shoot itself in the foot with recent media relations efforts.

Last week, it was Chairman and CEO Terry Semel getting ousted. It was portrayed as a love-fest between Semel, the Board of Directors, and founder and new CEO Jerry Yang, which clearly was not the case. Semel had been under fire from investors just days before, where he said he still had a passion for the job.

Yet, last week, he said that he was clear in telling the board of his “desire to take a step back sooner rather than later.” In return for his graceful exit, the board gave him the soft boot, instead of a swift kick, by making Semel the non-executive chairman instead of severing ties completely.

This weekend – yes, it was so important they couldn’t wait until Monday – Yahoo announced that it would combine sales forces for its search ads and display ads, making search sales SVP David Karnstedt the head of North American sales in the unified organization. This left chief sales officer Wenda Harris Millard, widely credited with giving Yahoo major Madison Avenue credibility, out in the cold.

Millard went to work for Martha Stewart Omnimedia, and all might have been well, except the botched PR job by Yahoo included a quote from Millard’s former boss, Gregory Coleman, basically saying that she wasn’t qualified to do her job anymore, so she was let go: “While Wenda was a big contributor to our success in the past, the industry has shifted and requires a different set of skills to take the business forward. We appreciate her dedication during her years of service and wish her well in the next chapter of her career.”

Millard spoke to Kara Swisher at All Things Digital, where she told her side of the story, which was that she resigned of her own accord, rather than take a job as head of Yahoo’s international sales.

I don’t know who’s telling the truth here. Semel clearly either lied to shareholders when he said he still wanted the job, or to everyone when he said he had been wanting to leave for a while. Either Millard or Coleman are not being truthful, and judging by Swisher’s talks with insiders, I’d say there’s some of that on both sides.

Yahoo needs to come clean and own up to its problems, and make the changes that everyone knows it needs to make. Do it all at once now and get it over with, instead of letting things continue to get out of hand, and then ham-handedly trying to spin the news in a positive light.

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