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Maggie Shiels

The sinking house of Yang

  • Maggie Shiels
  • 20 Jun 08, 09:15 GMT

While Yahoo punches out fun facts on its website, here's one I bet it won't be bleating about. More senior executives have jumped ship from Yahoo in the last few months than at any other high tech company.

Yahoo officeSomeone might quibble with that 'fact' by punching out some numbers from say Google which has recently suffered its own share of brain drainage.

But it has to be said that with the spotlight on Yahoo following the disastrous Microsoft shenanigans, it does seem like the company is a bleeding animal given the number of top honchos who are calling it a day at the Sunnyvale firm.

The highly respected blog TechCrunch has done a great job actually tracking exiting Yahoo execs since January 2007. Mike Arrington has listed 50 people who have decided to pack it in and that's everyone from the VP of engineering to the VP of Global Research and from former CEO Terry Semel to Ambassador Plenipotentiary to Madison Ave Yahoo!

What!

This week alone must surely have shareholders wondering what on earth is going on. Six high level execs have quit including the talent behind the phenomenally successful photo sharing site Flickr which Yahoo bought in 2005 to arguably give them some street cred.

And now comes news that another three major lynchpins in the organisation are set to call themselves ex-Yahoo employees and perhaps sign up to the Yahoo alumni page on Facebook which boasts thousands of former Yahoo-ites!.

Qu LiThe three who are leaving are Qu Li, head of search and monetization who has been described by insiders as a 'rock star' and 'someone that people would go to war for"; Vish Makhijani the head of Yahoo Search and Brad Garlinghouse the head of press. Actually Mr Garlinghouse only has one foot out the door according to some reports.

He is however famed for his 2006 Peanut Butter Manifesto in which he said "I've heard our strategy described as spreading peanut butter across the myriad opportunities that continue to evolve in the online world.

The result: a thin layer of investment spread across everything we do and thus we focus on nothing in particular. I hate peanut butter."

Hours after the news broke of this trio's departure came the confirmation that Joshua Schachter who founded del.icio.us, which Yahoo bought in 2005, has also decided to resign and join the "gloriously unemployed."

Yahoo sign in Times SquareGreg Sterling who is a tech analyst and writes for searchengineland.com told the BBC "This all looks bad for Yahoo because it's happening so publicly and will impact on morale and those workers doing the actual work at a lower level."

Yahoo's statement to the BBC was pretty bland saying "We have a deep and talented management team across all areas of the company. Yahoo continues to be a leader in our industry and remains a unique, exciting and important place to work."

Not anymore I guess according to the myriad number of senior execs who have chucked it all in at the internet portal.

It has been rumoured for weeks that Yahoo is planning a major re-organisation and maybe this slew of senior execs are jumping before being pushed.

Mr Sterling ventures "The company has been through a number of re-organisations in the last year and perhaps there is a big of re-org fatigue."

Jerry YangAnd this all begs the question when will Jerry Yang walk the plank? He might have just celebrated one year in office as CEO, but it's looking pretty doubtful there will be a second anniversary.

The decision by so many high profile senior managers of the company to quit "is akin to a parliamentary vote of no confidence in Jerry Yang" says Mr Sterling.

Shareholders for their part will get to exercise their voice at the annual shareholders meeting on the 1st of August. It's certainly gearing up to be a rip roaring occasion.

And if any departing staff are unsure where to next hitch their wagon, they would do well to have a look at the full page advert that Microsoft has posted in the San Jose Mercury News.

The ad informs prospective employees "There are now very few companies that remain truly committed to defining the future of search and online advertising. Microsoft is one of them."

Comments

  • Comment number 1.

    "There are now very few companies that remain truly committed to defining the future of search and online advertising. Microsoft is one of them."

    The only problem is that Google is another.

    Microsoft has always been playing catch-up with search. It was probably the major reason it wanted Yahoo! in the first place. And Microsoft's usual market entry tactics of throwing money at a project/market segment and bulldozing the competition just doesn't to be a tenable proposition here when you look at Google's own reserves and huge lead.

    Google's own problems are less easy to pin down, though I suspect lots of those leaving have what Douglas Coupland once described as a "1.0 mentality". Once something hits maturity, for some people the challenge is lesser, so they move on.

    Yahoo is dying on its backside, squeezed by competitors it cannot really match any longer. It also is not quite sure exactly what it wants to be anymore; no wonder morale is bad. It is however on in the ye for all the greedy shareholders who are whinging about been denied a marriage of convenience and short-term profit with Microsoft. They are helping in no small way to finish Yahoo! off, though they can but see it.

  • Comment number 2.

    To build a Google beater Microsoft (and/or Yahoo) wouldn’t have to have a better search engine than Google, they`d just have build one as good as Google`s. At the moment neither are anywhere close. The majority of people that use Google at present do so because they are generally happy with the search results it produces. And that’s enough to keep them going back.

    They would then also have to pray that Google took its eye off the ball so that people began to distrust Google`s results enough to try an alternative.
    Or that Google:
    1) Tried to become a different type of service (a portal for example).
    2) Began to clutter it`s homepage with all the other services it`s diversifying into. (There are signs this may happen.)
    3) Got enough bad publicity for people to want to try an alternative simply so they don`t have to associate themselves with Google. (Microsoft being the 300 lb gorilla in the OS and office suite market already has an image problem; many open many source adherents are so from an ideological dislike of Microsoft.)

    Google and Yahoo both emerged just over a decade ago by both demonstrating that they had better approaches to searching than AltaVista`s metatag approach. (Remember Altavista? It used to be the Search engine king.) There is always the possibility that two guy`s working from a garage will come up with a much better way of searching (there are still a lot of other search engines out there), get lots of great publicity and displace Google, MSN And Yahoo.

    But they’d also have to come up with a better alternative to Google`s Adsence (its advertising and revenue strategy) so that advertisers deserted Google; for at the end of the day this is all about money. Given Microsoft dominate so many markets I’m not unhappy that they don`t monopolise search (and its revenue) too.

    Personally I like Yahoo`s other services (although not often mentioned many of the services on its portal are still much better than the competitions (cough *MSN*)), but they don`t earn much money; that is Yahoo`s problem. I really hope Yahoo can come through this. Ask yourself, do you really want Microsoft to dominate absolutely everything? There`s nothing to gloat about here.

  • Comment number 3.

    Well my thoughts are that Microsoft would not have done any better. I am sure Yahoo employees would have jumped ship anyway if it was taken over by Microsoft. At least Yahoo still retains control now instead of Microsoft calling the shots and running Yahoo to the ground.

  • Comment number 4.

    I expect the cause is a fair bit less romantic.

    These are smart guys, and I expect they've taken a look at the international markets, looked at Yahoo!'s decreasing stock value and decided to cash in their shares to ride out the storm.

  • Comment number 5.

    Whenever there is a shuffle, employees are bound to move. http://blog.abhishekonline.info/2008/06/29/is-yahoo-sinking/

  • Comment number 6.

    The worst thing Yang has done is to convince investors that he's not running the company in their best interests. Rather, he runs it like a personal fiefdom, and lets his personal grievances get in the way of making money.

    Yahoo is a dead company walking.

 

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