Tuesday, November 18, 2008

The Other Shoe

So the inevitable happened: Yang "stepped down" as CEO at Yahoo. With the share price now trading at barely one-third of the cash offer made by Microsoft back in February, even the Yahoo board finally sat up and took notice. Jerry will stay in the big chair until a replacement is found when he will return to being Chief Yahoo, a no-line-management role that allows him to sit in a corner and think about stuff.

Now the fun bit starts, namely speculation about who they will sucker attract to Yahoo to take over. Obviously, all those internal to the company who could have stepped up a few months ago have already bailed so they'll have to go outside, doubtless amidst cries of "fresh blood" and "new ideas". (Yes, exactly the same logic they used to explain bringing Semel on board from Hollywood, a step you can argue led them down this treacherous path in the first place.)

Any chance the previous discussions with Microsoft, Google and AOL will re-surface? Doubt it, especially with all the market turmoil still raging at its peak. No one knows for sure what the on-line advertising spend will look like going into '09 (though it's already becoming clear that old media spending on ad placement is dropping through the floor), so therefore it's much better just to sit on the sidelines and see what happens next. After all, it's hard to see Yahoo getting more expensive any time soon!

Still seems weird, though, to see once high-flying Internet companies go from kings to clowns in such a short space of time. Back in the day (damn it, I hate Sarah Palin and her horrible folksy phrases) major companies grew large and then stayed there, continuing to dominate their spaces until either the government took them apart or they were overwhelmed by the next market or technology shift. Of course, the same basic process plays out today in the Valley but now it's on timescales that are barely credible: companies stumble and fall in a matter of weeks or months instead of the decades it used to take.

This is one hell of a "take no prisoners" kind of place.

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