Return of the CEO

By David F. Carr  |  Posted 2007-10-26 Print this article Print

Losing its lead in Internet traffic and ad revenue along with its chance to win the search market, Yahoo aims to reinvent itself.  But with a slowing economy and downward forecasts for earnings, how bad are things for Yahoo? That could depend on Microsoft’s plans to buy the struggling Web portal.

Return of the CEO

Does Yahoo CEO Jerry Yang have what it takes to revive the company's fortunes?

Yang and David Filo created Yahoo while they were grad students at Stanford, but when they formed a company in 2005, they ceded top management duties to others, starting with Yahoo's first CEO Tim Koogle. Yang was always part of the management team, and often served as its public face, but until now he and Filo have shared the cheerfully vague title of Chief Yahoo.

That's one reason many skeptics, including former employees, doubt Yang can serve as Yahoo's equivalent to Apple's Steve Jobs—instead of returning to take the reins of the company he started, as Jobs did at Apple, Yang is taking leadership of the company for the first time.

The comparison strikes home for Chris Tung, a former Yahoo interaction designer who now works for Apple.

"In terms of innovation, you're always going to take a risk," he says, but at Yahoo things tended to get bogged down in "analysis paralysis"—fiddling with usability tests and metrics gathering to postpone decision making.

"You cannot have innovation by consensus," Tung says. "You need someone who has the clarity of vision, the confidence, sometimes just the utmost brashness to push it through." From a distance, at least, Yang never displayed those qualities, he says. "I never saw him, or anyone else there, have that clarity of vision, that ability to push things through."

Ken Rudman, a former Yahoo product manager, expresses more faith in Yang, calling him "extremely competent" and suggesting he has learned the ropes by working closely with Yahoo's previous CEOs. "I do think he could be successful," Rudman says. "Is he what Wall Street is looking for? I don't know."

Other former rank-and-file employees who spoke with Baseline, on and off the record, have at best lukewarm impressions of Yang's leadership skills, though some hold out more hope for Susan Decker, Yahoo's new president.

One former executive who believes Yang is the right choice is Tim Sanders. Sanders, who became part of Yahoo when the company acquired Broadcast.com, established himself as a closer of big deals as chief solutions officer, and still serves as DJ at the company holiday party. (After the publication of his book Love Is the Killer App, Sanders left in 2005 for a career as an inspirational speaker, writer and management consultant.)

Yang "has been groomed for years to do this, since the moment Yahoo began," Sanders says. "He's been part of every important meeting, every acquisition, every product release. He's a punch-you-in-the-arm, tellyou- that-you're-wrong kind of guy, but he also makes you feel good about your contributions. And he has such a passion for the Yahoo brand."

Although Sanders thinks Yahoo has made its share of mistakes, he says its current problems are "less about the things Yahoo did wrong than some breathtaking things Google did right. When the history of Yahoo is written, we're going to look back at this as a period of time, unfortunately longer than one would have hoped, of readjustment and realignment, and having a fierce competitor."

If the challenge is for Yang to channel Steve Jobs, Sanders says one way to do it would be to use the negativity about Yahoo as a motivator and challenge employees to prove the skeptics wrong. "I would show them all the negative press about Apple from 15 years ago," says Sanders, recalling a time when shrinking marketshare for the Macintosh seemed to spell doom for that company. "But they stuck to their guns, they found the iPod, and the world has changed."

In much the same way, Sanders says, "I think the public statements of arrogance from Google could be used as great motivators" to help Yahoo find its own next breakthrough product.

One sign Yang is thinking along the same lines: He invited Jobs to an October meeting of Yahoo—as a motivational speaker.—D.F.C

David F. Carr David F. Carr is the Technology Editor for Baseline Magazine, a Ziff Davis publication focused on information technology and its management, with an emphasis on measurable, bottom-line results. He wrote two of Baseline's cover stories focused on the role of technology in disaster recovery, one focused on the response to the tsunami in Indonesia and another on the City of New Orleans after Hurricane Katrina.David has been the author or co-author of many Baseline Case Dissections on corporate technology successes and failures (such as the role of Kmart's inept supply chain implementation in its decline versus Wal-Mart or the successful use of technology to create new market opportunities for office furniture maker Herman Miller). He has also written about the FAA's halting attempts to modernize air traffic control, and in 2003 he traveled to Sierra Leone and Liberia to report on the role of technology in United Nations peacekeeping.David joined Baseline prior to the launch of the magazine in 2001 and helped define popular elements of the magazine such as Gotcha!, which offers cautionary tales about technology pitfalls and how to avoid them.

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