It's never fun to watch a good company disintegrate but it seems apparent that Yahoo (NASD:YHOO) is on a rapid downward trajectory.
Jerry Yang may believe that he's done the right thing by fending off Microsoft and Carl Icahn, but his company seems to have no strategy for moving forward and many of its most innovative leaders are jumping ship. It seems that every time I glance at Friendfeed, there's another report of a Yahoo executive stepping down or planning their exit.
The rush to the exits began a few days ago when Jeremy Zawodny announced he was leaving (today he added the fact that he will be joining Craigslist in July). Then came the news that Flickr co-founders Caterina Fake and Stewart Butterfield were leaving, while Jeff Weiner would become EIR at Greylock and Accel Partners. This morning, advertising leader Qi Lu was said to be leaving, with search GM Vish Makhijani close behind. Kara Swisher broke the story that Brad Garlinghouse was seeking to spread his peanut butter elsewhere, while tonight brought news that Delicious founder Josh Schachter was leaving as well (via a Dave Sifry tweet).
TechCrunch provides a chart showing all of the Yahoo execs who have jumped ship the past eighteen months. Of course, since it was published this morning, it's already out of date. Read the comments section to see additions.
It's not shocking that any of these individuals would move on. After all, many of them got to Yahoo via acquisition and were more suited to the startup world than a large media company. But to see the floodgates burst like this demonstrates that Yang and Sue Decker have lost the confidence of their management team. And the $22 stock price attests to the fact that they've long ago lost the confidence of Wall Street.
How does Yahoo respond to these challenges? They outsource part of their search business to Google (though keeping the full cost structure to develop and manage Panama) and today announce the innovative idea of a new email domain - "Ymail".
It's time to replace the management team. Yahoo still has some great assets (including many acquisitions that were never fully integrated) and has traffic numbers surpassed only by Google. I'd like to see them give their full search business to Google, and focus their efforts on leveraging their strengths as the premier web content company. Assembling a new management team will be a challenge though, as most of the key lieutenants are now gone so an outsider would have few people inside to lean on. Meanwhile, Henry Blodget suggests that Sue Decker may be getting ready to take over the top spot.
I like Yahoo and hope they can turn things around. But watching them twist in the wind is reminding me of watching the NY Knicks the past few years under Isiah Thomas. Sometimes you need to remove the leader and start over.
