Yang Steps Down As Yahoo CEO, Search For Successor Begins

Expect Yahoo’s share price to jump tomorrow - Jerry Yang will be stepping down as CEO of the company, a job that he took on an interim basis in June 2007.

Yang will return to his former role as Chief Yahoo, and will remain on the board of directors. The company has hired executive search firm Heidrick & Struggles to find the new CEO.

This was an unavoidable event, and in our opinion Yang took too long to step down. In May it was clear that Yang’s heart was no longer in it, and he reconfirmed that last month at the Web 2.0 Summit. Under his watch the company has lost tens of billions of dollars in market cap and thousands of former Yahoo employees (and hundreds of execs) are now gone.

How much of the downfall was his fault? It’s impossible to say, except that he takes full responsibility for mishandling the Microsoft acquisition offer last February. One thing you have to love is Yang’s tenacity in keeping Yahoo an independent company at any cost. But what shareholders and employees need is a leader with an actual plan.

Who will be the next CEO? We speculated back in June that Jeff Mallet or Dan Rosensweig were possible candidates. Mallet wouldn’t consider the job, we’ve heard. But Rosensweig would probably take it if offered.

Whoever ends up with the job, let’s just hope it’s an outsider. Yahoo is being clear that they are considering internal candidates. President Sue Decker is likely being considered. But ex-execs we’ve spoken with say she was a big part of the problem at Yahoo, and if she takes over as CEO it will likely be more of the same.

The press release:

Yahoo! Conducting Search for New CEO
Co-Founder Jerry Yang to Step Down Following Appointment of New CEO
and Return to Former Role as Chief Yahoo! and Board Member

SUNNYVALE, Calif., Nov 17, 2008 (BUSINESS WIRE) –

Yahoo! Inc. (Nasdaq:YHOO) today announced that its Board of Directors has initiated a search for a new Chief Executive Officer. Jerry Yang, co-Founder of Yahoo!, has decided to return to his former role as Chief Yahoo! upon the appointment of his successor as CEO, and he will also continue to serve on the Board. Yang, 40, assumed the CEO role at the Board’s request in June 2007, and he has led Yahoo! through a strategic repositioning and transformation of its platform.

Chairman Roy Bostock, working with the independent directors and in consultation with Jerry Yang, is leading the process of assessing potential candidates and determining finalists for consideration. The search will encompass both internal and external candidates, and the Board has retained Heidrick & Struggles, a leading international executive search firm, to assist in the process.

“Over the past year and a half, despite extraordinary challenges and distractions, Jerry Yang has led the repositioning of Yahoo! on an open platform model as well as the improved alignment of costs and revenues,” said Roy Bostock. “Jerry and the Board have had an ongoing dialogue about succession timing, and we all agree that now is the right time to make the transition to a new CEO who can take the company to the next level. We are deeply grateful to Jerry for his many contributions as CEO over the past 18 months, and we are pleased that he plans to stay actively involved at Yahoo! as a key executive and member of the Board.”

“From founding this company to guiding its growth into a trusted global brand that is indispensible to millions of people, I have always sought to do what is best for our franchise,” said Jerry Yang. “When the Board asked me to become CEO and lead the transformation of the Company, I did so because it was important to re-envision the business for a different era to drive more effective growth. Having set Yahoo! on a new, more open path, the time is right for me to transition the CEO role and our global talent to a new leader. I will continue to focus on global strategy and to do everything I can to help Yahoo! realize its full potential and enhance its leading culture of technology and product excellence and innovation.”

Resource - TechCrunch

Google Pulls The Plug On Yahoo Advertising Deal

After vowing repeatedly to go through with its search advertising deal with Yahoo no matter what the Justice Department does, Google reversed course today and pulled the plug on the deal. Chief legal counsel David Drummondwrites:

. . . after four months of review, including discussions of various possible changes to the agreement, it’s clear that government regulators and some advertisers continue to have concerns about the agreement. Pressing ahead risked not only a protracted legal battle but also damage to relationships with valued partners. That wouldn’t have been in the long-term interests of Google or our users, so we have decided to end the agreement.

We’re of course disappointed that this deal won’t be moving ahead. But we’re not going to let the prospect of a lengthy legal battle distract us from our core mission. That would be like trying to drive down the road of innovation with the parking brake on.

Apparently, the recent revision of the deal’s terms to cap the amount of Yahoo’s revenues generated by Google at 25 percent was not enough to satisfy the Justice Department. And Google threw up its hands, giving up the fight.

The intransigence of the DOJ made the deal untenable. There was no longer enough upside to put up with all of the antitrust scrutiny the deal would continue to bring.

And then there is the Microsoft factor. The only reason Google offered the deal in the first place was to help Yahoo fend off Microsoft’s takeover advances earlier in the year. It is a different world now. Microsoft seems to have moved on. The financial markets have collapsed. Yahoo is going to have to fix its own problems.

Interestingly, Yahoo’s stock is up nearly 5 percent to $14 on the news (while Google’s is down 2 percent to $358). Is that because Yahoo’s destiny is once again in its own hands, or because Microsoft can now make another run at the company?

Microsoft was the biggest opponent of the deal, and its lobbying efforts seem to have paid off. It can now buy Yahoo for a much cheaper price than it originally offered (one analyst suggests $20 a share, compared to the $33 Microsoft once offered), and Yahoo has nowhere else to turn (except AOL, which isn’t doing so great).

Resource - TechCrunch

Flickr 3 Billion Photos Uploaded (and 30% the Size of Facebook)

Photo sharing site Flickr has announced that they’ve now had 3 billion photos uploaded to their servers. It was almost exactly a year ago that the site saw its 2 billionth photo uploaded, meaning that Flickr has grown just over 50% in 2008.

While that’s pretty massive, it pales in comparison to what now appears to be far and away the #1 photo sharing site: Facebook. Just last month, the social network announced that its 10 billionth member photo had been uploaded. Unfortunately (well, depending on your sense of irony), like other “milestone” photos uploaded to various services, there is nothing especially notable about the 3 billionth Flickr photo, which was uploaded by user Garrett Ryan Smith:

While Flickr might not be the largest photo sharing site in the world, it has proven to be one of the smartest acquisitions made during the Web 2.0 era. Yahoo scooped up the site for a mere $35 million in early 2005, long before massive deals that saw YouTube sell for $1.6 billion to Googleand Facebook receive a $15 billion valuation from Microsoft.

Resource - Flickr: 3 Billion Photos Uploaded (and 30% the Size of Facebook)

Yahoo Layoffs Expected to Hit This Week

Yahoo started out the year with layoffs, and it is going to end the year with more. The layoffs have been expected ever since Yahoo hired hatchet men from Bain & Co. to come help with the downsizing. The exact number of layoffs is still not known—between 1,000 and 3,000 are the numbers being discussed. During its earnings conference call on Tuesday, Yahoo is expected to announce how many people it will let go. In addition, operating budgets across the board are expected to be cut 15 percent.

In January, Yahoo laid off 1,000 people, and all year it has been suffering from a major drain of talent. But it still has plenty of employees—about 14,000. Getting rid of another 10 percent or so would have a meaningful financial impact by lowering expenses, but it would also lower morale.

Not that Jerry Yang has much choice these days. We’ll update the layoff tracker when the final numbers are known.

Resource - TechCrunch

Yahoo Web Analytics to finally give Google some competition

Yahoo must have adopted a strange new policy of putting acquisitions to good use, exhibited in its latest form by the announcement of Yahoo Web Analytics. Marketed as "an enterprise site analytics tool," the private beta of Yahoo Web Analytics reveals a clear initial focus on business and commercial web sites, and some unique features could give competitors like Google a run for their money. Yahoo Web Analytics is the result of Yahoo's April acquisition of IndexTools, a web analytics software provider geared toward online marketing. With such a quick turnaround into a Yahoo product, albeit as a private beta for Yahoo's 150,000 small- to medium-size business web site customers, it's clear that Yahoo is gunning to gain share in a market it arguably should have been neck-deep in years ago.

Yahoo's choice to acquire IndexTools and the upcoming features in Yahoo Web Analytics also speak loudly for how badly the company wants a piece of the market. Specifically, Yahoo Web Analytics boasts "near real-time" data aggregation and visualization, which—if true—will be a significant leg up on Google Analytics' typical 8- to 12-hour turnaround time.

In addition to faster data, Yahoo will also provide all analytics data in raw form, instead of a periodic aggregation of things like total visitors to a page. This access to data becomes quite significant with Yahoo's promise of a forthcoming API, another feature that Google Analytics doesn't match—at least not yet. This API will allow developers to access data for things like aggregating popular content, comparing with other data sets, exporting for backup, or moving to another system.

Being Yahoo's primary competitor in the free analytics space, though, Google is unlikely to let this challenge go unanswered, especially since Yahoo now offers an appealing combination of hosting and analytics packages. If Yahoo wants to gain relevance in this space, it's going to have to act quickly and open the beta up to the rest of the market. Perhaps most importantly, Yahoo will have to get the API in the hands of developers before Google ramps up to feature parity and removes the temptation for customers to switch.

Resource - Ars Technica