Jerry Yang is Stepping Down as Yahoo’s CEO

TechCruch covered the story of the stepping down of Jerry Yang as CEO of Yahoo.  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.

For many months the writing was on the wall.  Under Yang’s 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.

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.”

I’ll bet tomorrow Wall Street will give Yahoo a few dollars more for its shares.  It’s a sign of relief to see Yang release the command to a better leader in turbulent times.  Being a CEO was not Jerry Yang’s favorite cup of tea.  Good Day.

Source:  Yang Steps Down as Yahoo CEO, Search For Successor Begins – TechCrunch

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The Sinking Ship of Jerry Yang

As time passes by the future of Yahoo is more and more uncertain. It's sad to see a sinking ship.

Unless you have been living under a rock, you already know that Yahoo missed the opportunity to sell all its shares to Microsoft. The deal went On and Off for several months, until both parties decided that it was “Thanks but no thanks”.

Basically Microsoft’s unsolicited bid for Yahoo was worth $44.6 billion. The bid, which would consist of cash and Microsoft stock, valued Yahoo shares at $31 a share, a 62 percent premium on January 31, 2008 closing price.  Specifically this is what Microsoft proposed:

“I am writing on behalf of the Board of Directors of Microsoft to make a proposal for a business combination of Microsoft and Yahoo!. Under our proposal, Microsoft would acquire all of the outstanding shares of Yahoo! common stock for per share consideration of $31 based on Microsoft’s closing share price on January 31, 2008, payable in the form of $31 in cash or 0.9509 of a share of Microsoft common stock.

Our proposal represents a 62% premium above the closing price of Yahoo! common stock of $19.18 on January 31, 2008.”

At this moment, Yahoo’s share are selling for only $13.03 and the winds at Wall Street are still blowing strong.  If a miracle doesn’t happen soon, the price of those share will be near to zero, zip, diddly, nothing, nada, zilch.

I’m afraid Jerry Yang’s Yahoo resembles a sinking ship.  In an attempt to save their lives, many valuable top executives are jumping overboard.  Even though Yahoo recently announced a strategic reorganization, the situation hasn’t changed an iota.  The problem with this step is that that the company is losing many of the executives who have control over day-to-day operations.

And in some cases, the departures spread multiple steps down the hierarchy, depriving Yahoo of talent to promote and of expertise to train any new arrivals. Major turnover on this scale can turn succession planning into improv theater.

Yahoo played down the importance of the mass exodus. “We have a deep and talented management team across all areas of the company…and we continue to recruit outstanding talent,” the company said in a statement.

Yerry Yang is trying desperately to keep his vessel afloat, but Wall Street isn’t cooperating.  The latest action by Yang is to reduce it’s payroll by ten percent.  This will save the company $400 million in annual costs.  I’m afraid he will have to do more than that.  With precious gems like Flickr and Delicious, Yahoo should create new service consolidations to make the profit machine start coughing greenbacks.  For that you need loyal, hardworking and innovative people on your side.  But the problem is, these are precisely the people leaving the company.

This is the E-mail Yang sent to all Yahoo’ers on October 21, 2008 (Yang doesn’t like to use capital letters in his internal correspondence):

From: Jerry Yang [mailto:jerry@yahoo-inc.com]
Sent: Tuesday, October 21, 2008 2:20 PM
To: all-worldwide@yahoo-inc.com
Subject: update

yahoos,

i feel it’s important for me to reach out to you after our earnings announcement, and before our all hands meeting tomorrow.

we as a company have been through a tremendously challenging year; and managing the increasingly turbulent global advertising climate has been an important focus for the last three months.

throughout the first three quarters of 2008, we have been balancing between investing in our top priorities, and managing our cost structure. beginning in september, with the help of Bain & Co., we initiated a series of steps to determine how we can become more efficient and productive as an organization.

we heard from you through the YEES survey, and through your suggestions on backyard, and we’ve identified many areas that we all feel we can improve upon. our productivity efforts, based in part on what we heard from you, will involve initiatives such as streamlining our organizational structure through reducing layers and increasing spans of control, and eliminating redundancies. longer term structural efficiencies include consolidating facilities, improving procurement, and standardizing our global technology platforms.

today as part of our q3 earnings release, we said that our goal is to reduce our current annualized cost run rate of roughly $3.9 billion by more than $400 million before the end of 2008. we are targeting non-headcount expenses wherever possible, such as facilities and outside services. however, because compensation expenses are the single largest part of our costs, we anticipate a reduction of at least 10% of our global workforce by year-end.

affected employees will be notified of layoffs in the next several weeks. we understand that hearing this news now creates uncertainty, but we are moving ahead in a way that balances speed with a clear focus on accomplishing what is necessary to set the organization up for long term success. going forward it will continue to be important for us to make the right decisions to keep our business efficient and strong.

having layoffs is very difficult, particularly in light of all we’ve experienced this year. but we don’t take these decisions lightly, and are committed to treating affected employees fairly, offering severance and outplacement services.

the steps we are taking are not easy for us as a company, but as we become more fit as an organization, decision-making will be faster and it will be easier for us all to get more done and stay focused on our strategy. these changes will also prepare us to better deal with the macroeconomic downturn. as with previous downturns, yahoo! continues to be a place where consumers turn for information and communications, and is an integral part of their internet day. as the global economy improves in the future, i certainly believe that we will be stronger and benefit from the actions we are taking now.

as always, i thank you for all you do as yahoos.

best,

jerry

Will Jerry succeed and refloat his Titanic?  What do you think?  Good day.

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