Yahoo Exec Exodus Signals Uncertain Future - InformationWeek

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10/27/2015
10:36 AM
Larry Loeb
Larry Loeb
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Yahoo Exec Exodus Signals Uncertain Future

A steady stream of executives exiting Yahoo in recent months shows a lack of confidence that CEO Marissa Mayer can turn things around.

10 Google Milestones: From Stanford Dorm To Alphabet
10 Google Milestones: From Stanford Dorm To Alphabet
(Click image for larger view and slideshow.)

Yahoo CEO Marissa Mayer's "turnaround" strategy for the Sunnyvale, Calif.-based company may be hitting some big snags. High-level executives appear to be leaving in droves.  

Recent notable departures include chief development officer Jacqueline Reses, who left for Jack Dorsey's reinvigorated Square, and senior VP of marketing partnerships and platforms Lisa Licht.

Additionally, chief accounting officer Aman Kothari and chief marketing officer Kathy Savitt left the company in September. Savitt played an "active role" in the company's media business, apart from the CMO responsibilities, according to Yahoo. Senior VP of advertising and data platforms Scott Burke left in August, according to reports. He was with the company for 10 years.

And the list goes on.

As with many Silicon Valley companies, Yahoo has a long history of executive departures over the company's lifetime. But this latest round appears to be a pattern that shows a stunning lack of confidence by top level executives in Mayer's ability to pull off her grand goals for Yahoo.

When asked for a comment on the recent trend of executive departures, a Yahoo spokesperson told InformationWeek that the company will not "comment on rumors or speculation."

A possible reason for the long list of execs jumping ship is Yahoo's decision not to partner with Microsoft (a big company investor) and instead combine its search engine with Google, Mayer's previous employer.

(Image: Alija/iStockphoto)

(Image: Alija/iStockphoto)

Mayer announced the Google deal on Oct. 20 as part of Yahoo's third-quarter earnings report, which missed Wall Street's estimates. Yahoo's stock dropped 1.6% following the announcement.

The deal with Google was not unexpected because Yahoo and Microsoft renegotiated their search engine agreement in April to allow Yahoo to try out other ad providers. 

Microsoft attempted to buy Yahoo in February 2008 for $31 a share, valuing the company at $45 billion. Could be that some employees may have thought that Microsoft would try again, considering how Bing and Yahoo search were cutting deals before the Google partnership solidified. If Microsoft did buy Yahoo, it would have lifted the share price -- something stock-vested employees would be happy about. However, with Microsoft now out of the picture, that scenario will not come to pass.

[ Read Yahoo Malvertising Attack Points To More Flash Problems. ]

Shares of the company are down since the beginning of the year. Other challenges for Yahoo include the IRS's decision that Yahoo's stake in Alibaba Group of China is going to be taxable when it is spun off, and the fact that Tumblr, the $1.1 billion blogging platform that Yahoo bought in 2013, doesn't look like it's going to generate the revenue Mayer wants to see.

Brian Wieser, a senior analyst at Pivotal Research Group, talked to the San Jose Mercury News about the departures and their significance for the company. "The fact that Yahoo hasn't figured out the right approach to turn the business around or produce a satisfactory strategy, frankly, would cause some people to look for greener pastures," he said.

He went on to say, "I think there were a lot of people who were attracted to the company by Marissa Mayer's presence, but it's safe to say that very little has gone right for the company."

Larry Loeb has written for many of the last century's major "dead tree" computer magazines, having been, among other things, a consulting editor for BYTE magazine and senior editor for the launch of WebWeek. He has written a book on the Secure Electronic Transaction Internet ... View Full Bio
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DDURBIN1
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DDURBIN1,
User Rank: Ninja
10/28/2015 | 1:13:54 PM
Re: Exodus of talent
@impactnow, This kind of reminds me of Earth Link and AOL.  Both went through the same process of their core group of executives with their heads stuck in the sand while customers leave like rats on a sinking ship only to be followed by the core executive jumping ship too.  Earth Link never figured out how to transform while AOL did.  I see Yahoo going the Earth Link route.
larryloeb
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larryloeb,
User Rank: Author
10/28/2015 | 1:12:12 PM
Re: Less Value, Higher Annoyance
Microsoft won't even try to eat them if they are still bound to Google with a long-term agreement.
DDURBIN1
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50%
DDURBIN1,
User Rank: Ninja
10/28/2015 | 1:03:45 PM
Re: Less Value, Higher Annoyance
Yahoo directors can't help themselves it seems by commiting suicide via forcing the maximum amount of advertising on customers while raising prices on every customer touch point they can.  It's the perfect storm of greed to drive more business away.  Microsoft will get a bargin price for Yahoo by next years end.
larryloeb
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larryloeb,
User Rank: Author
10/28/2015 | 12:48:38 PM
Re: Exodus of talent
Well, when they stopped remote working by employees it should have been obvious they were rethinking how they did working.

They have had some "layoffs by drips", sure; but nothing like what H-P has to do in order to control costs.
larryloeb
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larryloeb,
User Rank: Author
10/28/2015 | 12:45:59 PM
Re: Less Value, Higher Annoyance
To me, Yahoo was one of the few that made it out of the walled garden of computing (the days of AOL and Compuserve) into an open web. That was a real transisiton to undergo.

They had a pile of money left from WhenTheyWereFirst, and tried to reinvest it (like Alibaba) which got all these moneymen in there. Those are the guys that really run the place now.

They arent first in a space anymore. They dont have the vision.

But they are indeed still managing to get out there everyday right now
impactnow
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impactnow,
User Rank: Author
10/28/2015 | 12:33:24 PM
Exodus of talent

Any mass exodus of senior level executives sends a message across the enterprise that a future is not at hand. For Yahoo that means their "bench" will also most likely depart and follow their mentors leaving an even greater talent gap. Furthermore, Yahoo's employment environment appears out of sync with many technology companies and it will make it harder to get new talent in place. Unfortunately this signals a precipitous slide for Yohoo employees and the company at large.

DDURBIN1
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50%
DDURBIN1,
User Rank: Ninja
10/28/2015 | 12:27:45 PM
Less Value, Higher Annoyance

Yahoo should have taken Microsoft's 4 billion offer years ago.  Since then they've done just about everything possible to ruin their business.  The email service continues to raise prices every year.  I can't tell you how many times their email service is not accessible.  Rising rates on a poor service is not the ticket.  In addition, when I renewed Yahoo reset all my suppressed subscribtion while adding 20 new vendors.  I turned them all off but too late as I now get tons of spam.  Thanks Yahoo.  With Gmail and Outlook.com being free, they will soon lose my email business for sure and probably most of their other email customers.  They've handed over their search services to google, lost value and revenue there.  Using their website now every other entry is a sponsor's link.  It's like watching a commercial every other minute in a TV program.  

larryloeb
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larryloeb,
User Rank: Author
10/28/2015 | 8:40:32 AM
Re: The Thing that Wouldn't Die or Dead Man Walking
Mayer was an attrqction to others, considering her track record at Google.

Not so much now.

They are on their third CISO in 6 months.

All the cool kids are going elsewhere.

The situation at Yahoo is that past investors are trying to get some money out (think Alibaba) and aside from getting David Pogue to leave the NYT they havent attracted much first-rate talent.  

I mean, Katie Couric? Really?
nasimson
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nasimson,
User Rank: Ninja
10/27/2015 | 9:45:06 PM
Re: The Thing that Wouldn't Die or Dead Man Walking
> But this latest round appears to be a pattern that shows
> a stunning lack of confidence by top level executives in Mayer's
> ability to pull off her grand goals for Yahoo.

Or this shows Mayer's lack of confidence in top level executives in ability to pull off her grand goals for Yahoo.

New lead. New team!

Isnt that true also?
Thomas Claburn
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Thomas Claburn,
User Rank: Author
10/27/2015 | 7:09:03 PM
Re: The Thing that Wouldn't Die or Dead Man Walking
>The amazing thing about Yahoo is that it somehow manages to stay alive.

Agreed. It's not clear to me what Yahoo offers that anyone would want, apart from Flickr.
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