Yahoo Bites the Bullet
November 16, 2008
I have been a critic of Yahoo for many years. The company’s technology strategy makes an addled goose look like Leopold Kronecker. The company bought companies and allowed each to operate in a silo. The technology gurus fiddled as advertisers burned when the ad people couldn’t get data about Yahoo demographics across its different silos. Then the company went wacky and drove its share price into the ground. All Things Digital reports that reality has infected the Yahooligans. “Yahoo Layoffs Set for December 10 (And, No, Jerry Yang Is Not Leaving Too)” provides the details of the pre holiday event. You can read Ms. Swisher’s write up here. Mr. Swisher offers a bit of color about the proposed tie up of AOL and Yahoo. I won’t add to that subject other than to say the Yahoo crazy math of 1 + 1 = 3 doesn’t make much sense to me.
A more interesting question is, “Will the layoffs make any difference other than a pumping up the balance sheet a bit?” In my opinion, “No.” Yahoo has an untenable cost burden due to its technology promiscuity. The present management team does not have a way to address the cost problem effectively. More is needed than some layoffs. The company needs to begin the painful process of downsizing and rebuilding. Whole chunks of the business are going to have to be sold or shut down. Yahoo is a ship in need of an overhaul and quickly. Time is indeed running out.
Stephen Arnold, November 16, 2008
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