Where Does Yahoo Go From Here?

Yahoo has just announced the resignation of CEO Terry Semel amid chaos that is going on at Corporate. Terry’s departure is a long time in coming as the internet giant has fallen from grace with stockholders and users. The New York Times speculates that in a year, Yahoo will no longer be an independent company raising rumors again that Yahoo could be acquired or a merger could occur.

Before I dive into that, let me say that I’m very disappointed in Yahoo. I once said that if there was any company I would drop everything to work for, it was Yahoo. I’ve admired folks Like Jeremy Zawodny and the entire Flickr team and at one point would have dropped everything to work for them. This is no longer the case. For one, there seems to be a steady stream of Yahoos exiting the company. We hired Chad as our Director of Ad Sales and he still has his finger on the pulse of Yahoo. He says, the stream isn’t ending.

So where does Yahoo go from here now that Jerry Yang, the founder of Yahoo, is back at the helm. In some cases, the return to glory comes when the originator of the company vision returns. Take Steve Jobs return to Apple. (It’s too recent to know how Michael Dell’s return to Dell will affect the company).

Yang’s primary mission now, should he remain as longterm CEO, is to trim the top management, return the power of innovation and creativity to the Yahoos that make things happen. Google benefits from employee creativity by providing 20% time where 20% of the employees billable hours can go to whatever they want to grow the company. I don’t know much about Yahoo’s corporate culture, but it does not seem like they are doing very well judging by employee mass exodus.

Maybe a company like Microsoft could buy them but why would they? There’s too much bloat. Not enough value add. Portions of Yahoo could benefit Microsoft, I suppose. Or Google for that matter. Google could benefit from graphical ads. Microsoft could benefit from Flickr. YouTube/Google could find some nice integration with MyBlogLog. Microsoft could probably revive the Yahoo! Music group as a value add to their own music service which is in a lot of pain.

The question posed is where is Yahoo in a year? I don’t know. I think it’s more likely that, if Yang cannot turn the company around, the company will spin its business units off and sell assets. They need to find a core business. Apparently, it’s not search. So what is it? If they can trim the fat and find their core business, maybe they survive 2008. If not, it’s been a nice ride. I’m pretty happy I never took a job with Yahoo.

Reader Question: What does Yahoo have to do to remain relevant in the 2007-2008 era of the interwebs?

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