Yahoo: Cleaning up Yahoo’s business is proving a Sisyphean task, and the US Internet hodgepodge’s corporate dysfunction makes it doubly so. Firing chief executive Carol Bartz could be a step forward — at the very least, it may remove some saucy language from the company’s board minutes. But, Yahoo’s directors have done so in characteristically shambolic fashion, and created even more impediments to progress. Yahoo needs a simpler solution — a breakup.
It’s very hard to arrest the downward trajectory of once-dominant Internet firms. Consider MySpace or AOL. But, Bartz took the questionable step of sending the firm’s crown jewel — its search business — to Microsoft on surprisingly poor terms, precluding a Microsoft bid for the whole company. Moreover, in her 30 months in situ, Bartz never found a way to monetize the group’s non-controlling stakes in growing Asian firms Yahoo Japan and China’s Alibaba, which comprise much of Yahoo’s $16 billion value.
This should be a clear priority for Bartz’s successor, one that should allow management to focus on what is left of the company’s online businesses, like news, finance and job listings. But, nothing is ever simple at Yahoo. After firing Bartz by telephone, it has ominously appointed an Orwellian “executive council” to assist interim CEO Timothy Morse, including co-founders and “chief Yahoos” David Filo and Jerry Yang, co-founders of the company.
Given that this duo, along with chairman Roy Bostock, played key roles in flubbing Microsoft’s $45-billion bid three years ago, it’s curious they are still involved with the company — let alone now effectively running the shrunken group. For shareholders’ sake, Yahoo needs to whittle down and refocus. It’s hard to see how the men who remember the firm’s glory days will be especially keen to make that happen.