November 17, 2008
Jerry Yang Resigns as CEO of Yahoo!!
Jerry Yang is no longer the embattled CEO of Yahoo!. He is now the embattled former CEO of Yahoo!. Late this afternoon, Yang sent an all yahoos memo announcing his resignation. As soon as the Board finds a successor, Yang will resume his original role as Chief Yahoo!, a title he and co-founder Dave Filo have shared for years. Riding the helm of the search and content network he and Filo started twelve years ago has been harder on Yang than he or anyone could have envisioned. Yang assumed the role of company CEO in June 2007 after Yahoo!'s last embattled CEO, Terry Semel stepped aside. Observers, shareholders and employees had been calling for Semel's resignation for a year before he decided to leave. At that time, Yahoo! was still a powerhouse of the Valley though much of it's potential energy was seen to be wasted on initiatives that were never quite completed and acquisitions they never fully integrated or monetized. Yang stepped in promising to take immediate action after 100 days of contemplation. When the hundredth day came nothing much happened. As a matter of fact, aside from the constant divisional reorgs and the pink slipping of a few thousand employees, nothing much happened at all. The first eight months were fairly uneventful, relatively speaking... On the second last day of January 2008, Yahoo! released its Q4-07 financial report. Thus started the darkest days in company history and certainly the most difficult period of Jerry Yang's life. Yahoo! reported a disastrously weak Q4-07. With stock prices hovering just under $20 per share and no clear path out of the morass, Yahoo! looked dead in the water and ripe for the pickings. Following the natural law of the jungle, a predator naturally emerged. Microsoft initiated what amounted to the most passive aggressive hostile takeover attempt in modern business history. On January 30, Microsoft CEO Steve Ballmer called Yang to politely inform him that Microsoft was about to offer $31 per share, the equivalent of 1.33 the value of each share. Yang maneuvered the offer up to approximately $33/share and then refused to sell the company to Microsoft suggesting Ballmer's offer undervalued Yahoo!. That's when all hell broke loose. The period between late winter and mid-summer 2008 was the weirdest, most non-productive and downright stupidest period in modern tech history (and that's saying quite a bit). Yahoo! was offered a boatload of money by Microsoft but instead did everything it possibly could to avoid being bought. It even went as far as signing a deal with its arch-rival Google in which Google was able to supply AdWords through Yahoo!'s absurdly large content network. In other words, in order to avoid Microsoft, Yahoo! swallowed the ultimate poison pill and virtually gave up on its golden goose PPC program in favor of Google's. Yahoo! figured it could boost it's own bottom line by $800MM or more by dealing with Google but instead was left standing at the alter when Google balked in the face of anti-trust investigations from the Department of Justice. The deal fell apart about two weeks ago. It was Yang's last lifeboat and now he has drown. He was in way over his head. It's too bad but that's the way it is. From all accounts, Jerry Yang is a very nice fellow. He is also a genius, a master technologist and a new father. He was not a hard nosed CEO. Kara Swisher at All Things Digital obtained the memo Yang sent to the Yahooligans. The following is copied directly from her BoomTown Blog.
To: all yahoos Fr: Jerry Subject: update yahoos - i wanted to address all of you on the news we’ve just announced. the board of directors and I have agreed to initiate a succession process for the ceo role of yahoo!. roy bostock, our chairman of the board, is leading the effort to identify and assess potential candidates for consideration by the full board. the board will be evaluating and considering both internal and external candidates and has retained heidrick and struggles to help in this effort. i will be participating in the search for my successor, and i will continue as ceo until the board selects a new ceo. once a successor is named, i will return to my previous role as chief yahoo and continue to serve as a director on the board. last june, i accepted the board’s request that i assume the ceo role to restructure and reposition the company as a whole in order to more effectively meet the fast-changing needs of both users and partners. since taking on the ceo role, i have had an ongoing dialogue with the board about succession timing. thanks in large measure to your tireless efforts, we have created a more open, competitive yahoo! and we believe the time is now right to transition to a new ceo who can take the company to the next level. despite the external environment we face, the fact remains that yahoo! is now a significantly different company that is stronger in many ways than it was just 18 months ago. this only makes it all the more essential that we manage this opportunity to leverage the progress up to this point as effectively as possible. i strongly believe that having transformed our platform and better aligned costs and revenues, we have a unique window for the right ceo to take ownership over the next wave of mission-critical decisions facing the company. all of you know that I have always, and will always bleed purple. i will always do what I think is right for this great company. while this step will be an adjustment for all of us, i know it’s the right one. i look forward to updating you on this process as soon as the board has developments to share, and will continue to do everything i can to make yahoo! fulfill its full potential. thank you, jerryAnd so it goes... A successor will be named as soon as the Board can find one.