Yahoo's new CEO facing tough challenge
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Yahoo Inc. thinks it's back on the right track now that co-founder Jerry Yang has replaced Terry Semel as chief executive, but analysts and investors already are wondering whether the shake-up is just a prelude to more radical measures, including a possible sale or breakup of the troubled Internet icon.
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Yahoo has not reached a decision about&#160;Microsoft&#39;s acquisition offer&#160;and is considering &quot;a wide range of potential strategic alternatives,&quot; Yahoo CEO Jerry Yang said in an e-mail to employees on Wednesday.In the e-mail, which was addressed to &quot;yahoos&quot; and filed with the U.S. Securities and Exchange Commission, Yang said the Yahoo board is still reviewing the deal and will &quot;take the time it needs to do it right.&quot;&quot;Our board is thoughtfully evaluating a wide range of potential strategic alternatives in what is a complex and evolving landscape,&quot; he wrote in the e-mail, typed in all lowercase letters.Microsoft made its unsolicited bid for Yahoo last Friday, offering to pay $44.6 billion for the company, or 62 percent over Yahoo&#39;s closing share price Thursday. The deal would greatly expand Microsoft&#39;s search and advertising business and could help it to compete better with Google online.Yahoo is understood to be lukewarm on the offer. The company hopes a rival suitor will emerge with a counteroffer or that it can forge a deal with Google that will allow it to remain independent, according to Wednesday&#39;s Wall Street Journal newspaper, which cited unnamed sources.However, analysts have said it is unlikely another company could match Microsoft&#39;s sizeable offer, and a business deal between Yahoo and Google could raise antitrust concerns because of Google&#39;s already dominant market position.In the e-mail, Yang thanked the Yahoo staff for staying focused on their work amid the turmoil. The company has hired &quot;top advisors&quot; to assist it through the process and is focused on maximizing value for its shareholders, he said.
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Jerry Yang has failed to impress in his first seven months as Yahoo CEO. If he doesn't get his act together soon, he may not last another seven months.
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The CEO's resignation likely means more trouble ahead.
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When Jerry Yang stepped into the Yahoo CEO seat vacated earlier this week by Terry Semel, analysts said his goal may very well be to move Yahoo away from its all-things-media evolutionary path, and return it to its roots in search. If that's the case, then Yahoo has its work cut out for it, if today's numbers from Nielsen/NetRatings are to be taken seriously.
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Major management shakeups have become frequent at Yahoo in the past 10 months, as the company urgently tries to compete better, not only against archrival Google Inc. but also against nimble start-ups, and turn around its generally disappointing financial performance.
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HALF MOON BAY, California  - Yahoo Inc  has been slow to react to sweeping changes in Web consumer behavior and online advertising shifts, but it is picking up its pace, its top executives said on Tuesday.
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Yahoo! hopes to mimic Apple's success: the maker of the iPod famously rehired its founder to deliver technological inspiration. Now it is Yahoo!'s turn. The internet giant has appointed Jerry Yang (pictured right), its 38-year-old co-founder, as chief executive, to lead the fight against Google.
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Microsoft executives said very little on Friday about the undeniable challenges of integrating the company&#39;s Internet division with Yahoo, largely avoiding the proverbial elephant in the room that could delay or, in some cases, eliminate benefits of the deal.At the heart of the acquisition is Microsoft&#39;s goal of giving its online advertising and online services business a major boost, ending years of business and technology defeats at the hands of common rival Google.Microsoft wants to make sure that as online ad spending doubles to about $80 billion in the next three years, it will be in a much better position to grab a larger piece of the market, specifically in sponsored search, which is the biggest online ad segment and where Google dominates.As CEO Steve Ballmer, President of Platforms &amp; Services Division Kevin Johnson and Chief Software Architect Ray Ozzie said repeatedly during Friday&#39;s news conference, Microsoft wants to swallow Yahoo to accelerate its pace in online advertising. With Yahoo&#39;s online services, engineers, and ad platforms, Microsoft hopes to become a stronger competitor to Google than it is today.That all sounds fine in theory, but Ballmer and his colleagues said little about the energy and know-how they will need to make this proposed $44.6 billion acquisition work, considering that the companies have a significant overlap in online services, markedly different cultures, and an abundance of inflated professional egos at every level.Not to mention that Yahoo these days is far from functioning as a well-oiled machine. Yahoo has been in significant turmoil for more than a year. Seasoned executives who are experts on its business have struggled and largely failed to restore the company&#39;s technical edge and business focus. That&#39;s a mess that Microsoft will inherit and will have to solve in order for the deal to work its expected magic.In short, Microsoft must make sure that, in its quest for scale and speed, it doesn&#39;t end up getting stuck, its wheels spinning, trying to mesh Yahoo with MSN, while Google speeds further ahead. It&#39;s clear that to take advantage of the online ad growth, companies will need to innovate and change quickly, and not be sidetracked by acquisition distractions.Among the many emerging opportunities in online advertising are: the mobile sector, which is expected to go from almost nonexistent to vibrant in the coming years; social Web properties, such as social networks, blogs and social news sites, which haven&#39;t been monetized properly and hold great promise; and video, both in the form of video ads and ads in videos.There were indications during Friday&#39;s news conference that Microsoft may not have taken the time to fully assess the magnitude of the integration complications. Despite Ballmer&#39;s assurances that he personally has thought &quot;long and hard&quot; about the Yahoo acquisition, there is evidently a level of urgency about the move, or else the deal wouldn&#39;t have been an unsolicited offer, as Yahoo has portrayed it.If, as Ballmer indicated, the companies have been in on-and-off talks for about 18 months about a possible acquisition, it&#39;s fair to ask -- as a financial analyst did -- why they couldn&#39;t sit down privately and present, jointly, a more cooked deal. Basically, Ballmer admitted that Google keeps expanding its empire and time is of the essence.&quot;Any large integration process has risks associated with it. We&#39;ve all thought about it. We could have hired [more] engineers, but at the same time the market continues to grow and the leader continues to consolidate positions and there&#39;s nothing quite like putting together two larger sophisticated R&amp;D organizations,&quot; Ballmer said.Along with the inherent opportunity to sell more ads, Nick Patience, managing analyst at The 451 Group, also sees a &quot;potential integration headache&quot; with having to integrate Microsoft&#39;s ad platforms -- AdCenter and aQuantive -- with Yahoo&#39;s. Patience is also skeptical about the possibility of merging search indexes, and believes that the search engines will most likely have to continue to operate independently. Overall, the integration work would represent for Microsoft &quot;a step into the unknown,&quot; particularly since this would be by far the largest acquisition in Microsoft&#39;s history, Patience said.Gartner analyst Allen Weiner also sees potential integration challenges, particularly because he doesn&#39;t think either organization has a powerful leader who can take the reins of the combined entity and lead it into the future. &quot;They need someone like a Steve Jobs or a Bill Gates who has the charisma, vision, technical knowledge, and consumer knowledge to lead,&quot; Weiner said.On paper the acquisition has interesting potential, but it will all come down to how the integration is carried out, Weiner said. &quot;It&#39;s all about the execution,&quot; he said. &quot;The devil is in the details.&quot;Despite numerous acquisitions over the past few years in advertising and Web 2.0 technologies, Yahoo has struggled to jump-start its business, said JupiterResearch analyst Michael Gartenberg. &quot;At the end of the day, it hasn&#39;t all worked out for them,&quot; he said.While Microsoft executives are stressing that a deal with Yahoo would give it the scale to compete with Google, wrapping the two companies&#39; diverse technologies together won&#39;t be simple, Gartenberg said. &quot;In order to get to that scale, you&#39;ve got to be able to fit all those pieces and parts together,&quot; he said.Despite the integration concerns, Microsoft has good processes in place for managing acquisitions of large companies, said Gartner analyst Mike McGuire. However, it will be key for Microsoft to quickly put a senior management team in place as Google will continue to propel ahead as Microsoft sorts out the details. &quot;They are going to have to start showing some traction, or at least a really solid vision for how they will combine the companies ... early on,&quot; McGuire said.Matt Booth, a Kelsey Group analyst, thinks that the integration challenges will be major but predicts that Microsoft will work through them methodically, starting on the back end and linking services in a way that, as much as possible, is transparent to end-users, be they advertisers, publishers, or consumers. For services that are just too difficult to integrate, they will likely be kept separate. The last thing Microsoft wants to do is drive users away, Booth said.In a research note, Citigroup financial analyst Mark Mahaney said he is skeptical that a combined Microsoft-Yahoo would improve its search products enough to affect Google&#39;s position, since they both have been losing search market share and, in his opinion, seeing a decrease in their search innovation.&quot;Given what would surely be immense integration challenges, it&#8217;s hard for us to see how a Microsoft-Yahoo combination would create a greater technology competitor to Google at least for the foreseeable future,&quot; he wrote.&quot;We could see a scenario by which Google would actually gain more market share due to industry uncertainty over the integration of the deal,&quot; Mahaney added.
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In Yahoo's third-quarter performance call yesterday, investors and analysts heard for the first time the lower-key, back-to-basics approach of co-founder and re-installed CEO Jerry Yang, and newly elevated president Susan Decker. There's evidence their strategy is already working, but the next move involves a carefully calculated approach to attracting customers that goes against the current trend.
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Yahooâs chief executive and co-founder plans to expand the Internet stalwart to make it âa starting pointâ for consumers.
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By Michael Liedtke Associated Press  SAN FRANCISCO - Yahoo! Inc. is tackling its most difficult challenge since the dot-com bust with sweeping organizational changes aimed at cleaning up a mess of the Internet icon's own making.
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Following investor pressure for a management shake-up, Yahoo Inc. chairman and chief executive Terry Semel is stepping aside and will be replaced as CEO by cofounder Jerry Yang, Yahoo said yesterday.
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SAN FRANCISCO -- Just before Google Inc. went public nearly three years ago, Yahoo Inc. chairman Terry Semel assured a roomful of securities analysts and money managers his company would remain the Internet's brightest star. Frank Sinatra's "The Best Is Yet to Come" played in the background.
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Yahoo Inc.'s board reportedly held a special meeting Friday to discuss how to handle the slumping Internet pioneer's first response to Microsoft Corp.'s week-old takeover bid, setting the stage for either a quick resolution or months of acrimonious wrangling.
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By Elise Ackerman, San Jose Mercury News, Calif.  Jun. 24--Jerry Yang first tried to be chief executive of Yahoo, the company he co-founded, 12 years ago. He lasted just a few weeks before hiring more seasoned management.
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Yahoo CEO Jerry Yang Monday said Yahoo&#39;s goal for being users&#39; Internet home page is to keep it simple, and his pared-down first-time CES keynote appearance as the company&#39;s top executive reflected that.Yang&#39;s keynote on the first day of the annual consumer electronics techfest was a far cry from a splashy keynote Yang&#39;s predecessor Terry Semel gave at the show two years ago, in which Hollywood heavyweights such as Tom Cruise and Ellen DeGeneres helped him get his message across.Using only a few company cohorts to help him, Yang described the Yahoo portal as the starting point for people&#39;s Internet experience, the place that would connect them to a variety of services and devices.&quot;We continue to strive for the goal to keep the Web even simpler,&quot; he said. &quot;We want to drive home that you can come to Yahoo as your starting point and get everything you need done.&quot;Yang demonstrated a prototype for what a future Yahoo Mail inbox might look like, complete with links to third-party applications such as Evite and eBay built into a navigation bar on the interface.The inbox can be customized in a way that looks similar to what social-networking site Facebook does for its users. The demo also showed how Yang might invite some of his contacts to dinner and map out the location of restaurants they like.Keeping its message simple might not be a bad idea for Yahoo. The company faces a challenging time as it continues to struggle in online advertising against Google, remaining second to the search giant despite its first-mover advantage. Yahoo also is still in danger of being gobbled by a bigger fish, as rumors that Microsoft or another heavyweight may buy the Internet company continue to swirl.To help encourage more developers to build applications for its Yahoo Go mobile interface and its portal, Yang on&#160;Monday introduced face-lifts for both as well as plans to make both developer platforms more open.The new Yahoo mobile home page, which hasn&#39;t changed much in the past few years, is now customizable, with users able to choose &quot;content modules&quot; that will appear on their home page, said Yahoo executive vice president Marco Boerries.On the mobile side, starting on Monday, the Yahoo Go client will begin showing display advertisements to users, part of Yahoo&#39;s strategy to bolster its ad revenues. In addition to the new look of the mobile Web page, Boerries also introduced documentation that will let third-party developers build mobile widgets for Go.