Of course you change leaders at Yahoo!

It was only about 6 months ago that Microsoft was offering over $30/share for Yahoo!  That deal didn't happen.  And Yahoo! (see chart here) fell to under $ 11/share  .  Now Microsoft is saying "no thanks" despite the lower value - and Yahoo is changing it's CEO (read article here).  Should Microsoft have purchased Yahoo!?  Should Yang be fired?

No, and Yes.  Yahoo created what is probably the fastest growing business on the planet today - internet advertising.  And Search + ad sales has not only grown fast, it has been highly profitable.  Look no further than Google.  That one company so dominates a high growth sector is - well - incredible.  Why aren't there more competitors being more effective?  Yahoo! should be growing like a weed in a hot and wet garden. 

And that's why it shouldn't be purchased by Microsoft. Microsoft is thoroughly Locked-in to its old Success Formula all about the PC.  Money alone doesn't make a good company.  Cash reserves do not assure future growth.  And when you watch Microsoft you can see a company that doesn't really have a plan to grow.  Microsoft is far from close to the fastest changes and growth happening in technology today - such as wireless application devices - and search.  Just buying a company in either sector won't help if it is smothered by the Lock-ins surrounding Microsoft.  Microsoft has been without Disruption since Bill Gates shook up things and launched Internet Explorer.  And there's been no White Space as Microsoft drolled along creating updates to Windows and Microsoft Office.

At the same time, Mr. Yang has been unable to create the Disruptions and White Space that would allow Yahoo! to compete with Google.  Recently, he's even been trying to license Google technology to affirm a lifelong competitive position as no better than #2.  But there is no "iYahoo" phone in development - nor any other new business coming out of Yahoo!  For a high tech company, with rapidly changing competitors in a dynamic marketplace, to have so few White Space projects is the kiss of death - and has been the death of Yahoo!'s stock price.  So Yahoo! desperately needs a new CEO.  Someone willing to apply John Chambers or Steve Jobs style business practices to get Yahoo! competing more effectively and growing again - not trying to Defend & Extend the original Success Formula which the market has moved beyond.

I just wish the Board members at GM, Ford and Chrysler would follow the Yahoo! lead.  They need to change the leaders in those companies faster than Yahoo! did.  If we could get different leaders guiding these auto companies, and different managers carrying out Disruptions and White Space, we could dramatically hasten the return to ecnomic growth for America.

Comments

[Arfan]

Great article, Yahoo no one even uses now, I rarely touch it, every time need to search i use Google.