Now that Carol Bartz is out, the important question becomes what can be done with Yahoo?
Don't get me wrong - Yahoo has some amazing assets. Yahoo Finance remains the best financial information site on the web and my.yahoo still serves as the startup page for a huge base of users. Their traffic is ridiculous - north of 600 million uniques each month, and they have great assets.
But the company is incredibly unwieldy. While Yahoo is the oldest surviving "new media" company, it's become as oversized as the old media companies it sought to replace. But downsizing Yahoo won't be easy. Sure, it can sell off some assets (like its Alibaba and Yahoo Japan investments) but selling off parts of the core will be very difficult. Yahoo's businesses are intertwined and I don't know that you can break off major parts while retaining their value.
The biggest challenge that size brings is slowness. If you had an important development project to deliver, would you rather have a team of 5 or a team of 100? I'll take the team of 5 smart developers any day. Good software development is tricky. Cutting that team of 100 to 50 doesn't solve the problem.
Yahoo's traffic and content are attractive. But uncovering the value of those assets will be a huge challenge and I don't know who would have the magic to unlock it.
