Yahoo Staff Meeting Will Be a Pivotal Moment for Company

Yahoo's all-hands meeting Tuesday is more than a garden-variety pep talk. It's a chance for new CEO Scott Thompson to set the agenda at a pivotal moment for the struggling company.

Yahoo!'s headquarters in California.
Paul Sakuma
Yahoo!'s headquarters in California.

First, a look at the landscape: Thompson just last week announced plans to lay off 2,000 employees, or 14% of Yahoo's staff, in a bid to focus on the company's core businesses — what he defines as media and communications, platforms and data.

What exactly does that mean? Thompson hasn't fully explained. The old line at Yahoo was that good analytics technology would allow the company to make more money off of its massive user base by learning about users and targeting ads to them specifically.

Over the past two years, though, Yahoo has made little visible progress in achieving that goal — but Facebook certainly has. The social-networking upstart has posted operating profits that exceed Yahoo's ($1 billion for Facebook vs. $800 million for Yahoo) on less revenue ($4 billion vs. $5 billion) by doing what Yahoo hasn't figured out: Targeting brand ads.

And that's before you consider the other messes Yahoo is in: There's the proxy fight with activist investor Daniel Loeb that's going to come to a head in late June. There's the major talent exodus that has hurt Yahoo's prospects. And don't forget the Asian assets, Alibaba and Yahoo Japan — virtually Yahoo's entire stock price is tied to how the company manages to unwind its stakes in those entities.

All of that drama means Thompson will really have to struggle to stay focused — this all-hands meeting is his big chance to convince his fellow Yahoos that he's up to the task.