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Yang and Board finally manned up and made the tough choice for him to step out from day-to-day control of the company he helped create, and they helped drive into the ground together because of short-sightedness, hubris, and delusions of grandeur. I won't say greed.
I truly believe in dismissing Microsoft's [MSFT
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] $33 a share offer earlier this year was Yang adhering to what his idea of fiduciary responsibility was. And that in itself is why he needed to go. Clouded by self-interest, he lost his way, sacrificed tens of billions of dollars in shareholder equity, abandoned reason, and surrounded himself with people who slapped him on the back, or gave each other high fives when Microsoft pushed back from the table, depending upon who you believe, for a job well done.
To say Jerry Yang's departure is a stunner is to miss Yahoo's [YHOO
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] slide into the financial and relevance abyss: Yahoo shares before yesterday's spike on the Yang news were trading at a third of what Microsoft had offered. Yang needed to go. The stunner is that it took this long to get him out. The stunner is that the board gave him such an amazing amount of latitude to leaf-blow his way through so much shareholder value.
And now that same board, led by Roy Bostock, will conduct a Search for Yang's replacement. Even as the company tries to do whatever it can to revive a deal with Microsoft, ironically, for Yahoo's Search business. With Yang out, a deal with Microsoft is an almost certainty, and I believe, despite bluster to the contrary, and as I have written before, a deal that would include all of Yahoo, and not just Search.
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Back to that other search, the one for Yang's replacement. Because the company is likely to be sold off in pieces, that's gonna be a tough sell to attract an entrepreneur-oriented CEO. Some say that Yang didn't necessarily want to replace ousted CEO Terry Semel, but had to because the company had such difficulty coming up with a qualified candidate. If it were hard back then, imagine how impossible the task will be today?
Yahoo needs a baby-sitter now. More an operational whiz-kid than visionary. This company will be taken over. There simply is no other exit strategy. Some will say the right visionary leader can turn Yahoo's fortunes around. I'm not sure investors are willing to wait the three to five years it might take to do that after the wringer they've already been through.
Sue Decker's name has come up a lot as a Yang replacement. If she gets the nod, to me it's the company sending a clear message that it is biding its time for a new bid; someone to baby-sit the books while a new deal gets done. Bring in a heavily compensated "pioneer" and maybe that's a sign Yahoo wants to blaze its own trail.
Either way, Yahoo now sits squarely behind the 8-ball. Yang and Yahoo's board put the company there. He had to go. But sadly, for Yahoo shareholders and employees, his departure is way too little, and way too late.
Questions? Comments?
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