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What the Next CEO of Yahoo Should Do

Posted Nov 18, 2008 01:28pm EST by Aaron Task in Internet, Media, Newsmakers

With Jerry Yang stepping down as Yahoo's CEO, much of the focus is turning to his replacement.

After tackling the "Who's Next?" subject in part one, Henry and I discuss the closely related question of what the next Yahoo CEO should do in the accompanying video.

Among the suggestions (submitted humbly, of course):

  • Cut costs: That means more layoffs than previously announced but Yahoo's operating margin is only 7% currently vs. 29% at Google, as Henry details here.
  • Focus on display: Better to shore up areas of strength than continue to fight a losing battle with Google over search.
  • De-emphasize search: Pursue a new search deal with Microsoft (which needs the deal as much as Yahoo) and/or see if you can revive the outsourcing deal with Google.
  • Focus on original content. (yes, like Tech Ticker)
  • Vision: Understand that the company, despite its troubles, has unique assets that are nearly impossible to duplicate.

31 Comments

IVAN
IVAN - Tuesday November 18, 2008 01:36PM EST

Re-negotiate with Microsoft and merge

__A_YAHOO_USER__
__A_YAHOO_USER__ - Tuesday November 18, 2008 01:48PM EST

Sell Yahoo at good price let say $ 35 per share the most if not....We will know the true problem...

joej
joej - Tuesday November 18, 2008 02:05PM EST

MSFT setting on multi multi billion dollar cash pile acts as the massive gravitational force that sweeps throughout the galaxy.......the Great Attractor that pulls in all the lesser forces of nature. And of course the ruler of this power process....ubber person to the Jerry-like minions.................the GODFATHER BALMER the heavy heavyest of the heavies!!!!!!!!!!!!!! (now that Bill is sleeping till way past noon on Paul's boat somewhere in a beautiful coral sea with twinkling star and lovely Geisha all about)

Howard
Howard - Tuesday November 18, 2008 02:08PM EST

sounds like a couple young men hungry for bonuses and larger saleries. The New Wall Street. Semper Fi, Howard

Yahoo! Finance User
Yahoo! Finance User - Tuesday November 18, 2008 02:12PM EST

First, get rid of Tech Ticker

Defending Champ
Defending Champ - Tuesday November 18, 2008 02:21PM EST

Henry Blodget is the last guy that any of you should be listening to for financial advice or commentary. This CROOK (Henry Blodget) swindled investors out of millions of dollars in the late 1990's while making bogus tech stock recommendations. Now the public is listening to him again? Give me a break, this clown should be in prison. In 2002, then New York State Attorney General Eliot Spitzer, published Merrill Lynch e-mails in which Blodget allegedly gave assessments about stocks, which conflicted with what was publicly published. In 2003, he was charged with civil securities fraud by the U.S. Securities and Exchange Commission. He settled without admitting or denying the allegations and was subsequently banned from the securities industry for life. He paid a $2 million fine and $2 million disgorgement but kept millions more he earned in fees while promoting investments in stocks which failed.

Reedersong
Reedersong - Tuesday November 18, 2008 02:21PM EST

OIL TO 50!!!

george
george - Tuesday November 18, 2008 02:39PM EST

Yahoo is utter and complete toast. Yang is just the first rat off the ship. I can only guess how cheap MSFT will get the whole damn thing for ... but I can assure you it will be a third (or less) than what was offered several months ago. Yang should find a place the shareholders cannot find him and stay there. Maybe Cheney's secret hidey spot is now available?

Danilo
Danilo - Tuesday November 18, 2008 02:40PM EST

1st. Yahoo needs to freeze hiring like yesterday. 2nd. Yahoo needs to make a deal with Microsoft on the search engine 3rd. Yahoo needs to work on new generation search engine capability (what I call categorization and high value banner ads) Categorization means that if you type usb hard drive (you get to choice service, sales, tech help, user reviews of website helpfulness, links to community forums like flickr, facebook myspace) and not have to go through 20 pages of google to find what you need. Also the advertisers get interactive ads, not the highlighted, right corner ads that are getting so old. 4. Get rid of content that does not drive revenue (don't generate traffic for the sake of generating traffic, it needs to help you obtain 15-20% operating profit). 5. Its kind of obvious, but go the basics ... work with the big online advertisers and find what they want, what they are looking for, talk to the consumer that actually visit your webportal on a regular basis, talk about the features they like and don't like. Branding is nice, but work with companies that want the consumer's to have an interactive sales experience. 6. Focus on international profitable growth (I still think yahoo has big chance to get the international advertising and ad (search) markets) Don't get into international markets (ie China) unless it is clearly profitable today. 7. Create revenue generating small busines portals that can compete with Microsoft outlook, Salesforce, that combines website hosting, contact management, payroll services, online banking that would work for 90% of small business who currently use Microshaft, Quickbooks, ACT ...

Yahoo! Finance User
Yahoo! Finance User - Tuesday November 18, 2008 02:41PM EST

Microsoft will probably eventually buy Yahoo after Jerry Yang and anybody else that they don't like is out of the way and that the stock price has went down as far as it will go.

Danilo
Danilo - Tuesday November 18, 2008 02:41PM EST

1st. Yahoo needs to freeze hiring like yesterday. 2nd. Yahoo needs to make a deal with Microsoft on the search engine 3rd. Yahoo needs to work on new generation search engine capability (what I call categorization and high value banner ads) Categorization means that if you type usb hard drive (you get to choice service, sales, tech help, user reviews of website helpfulness, links to community forums like flickr, facebook myspace) and not have to go through 20 pages of google to find what you need. Also the advertisers get interactive ads, not the highlighted, right corner ads that are getting so old. 4. Get rid of content that does not drive revenue (don't generate traffic for the sake of generating traffic, it needs to help you obtain 15-20% operating profit). 5. Its kind of obvious, but go the basics ... work with the big online advertisers and find what they want, what they are looking for, talk to the consumer that actually visit your webportal on a regular basis, talk about the features they like and don't like. Branding is nice, but work with companies that want the consumer's to have an interactive sales experience. 6. Focus on international profitable growth (I still think yahoo has big chance to get the international advertising and ad (search) markets) Don't get into international markets (ie China) unless it is clearly profitable today. 7. Create revenue generating small busines portals that can compete with Microsoft outlook, Salesforce, that combines website hosting, contact management, payroll services, online banking that would work for 90% of small business who currently use Microshaft, Quickbooks, ACT ...

Don C
Don C - Tuesday November 18, 2008 02:43PM EST

If they don't sell themselves to Microsoft, which seems the only company left that will take them and is not afraid of the big bad wolf of the SEC, YAHOO! is gone in a years time due to the huge decreases in online advertising due to the economy. If not, the company will be sold off division by division and end up being a shell-portal. The one thing YAHOO! has going for it is its people (other than Yang) who has been busy getting in the way of progress for prersonal and egotisyical gain.

Yahoo! Finance User
Yahoo! Finance User - Tuesday November 18, 2008 03:05PM EST

When they can't come up with any real ideas it cut staff and layoffs. You don't have to be a CEO to know that, but it never addresses the real issues. But its good enough to get them a bonus.

Timothy
Timothy - Tuesday November 18, 2008 03:19PM EST

Restructure! Merge parts of Yahoo together, make Yahoo flow better, keep the good parts, get rid of the bad parts

Yahoo! Finance User
Yahoo! Finance User - Tuesday November 18, 2008 02:53PM EST

Microsoft has been burnt, they won't go back to the negotiating table with Yahoo... Besides if Yahoo shareholders didn't want $35 a share, now that the stock is worth $10, would they accept $15? MS shouldn't waste their cash pile or get into debt in this environment. On the other hand, Yahoo needs to focus on some of its key strengths. I think Yahoo Finance is one of the best sites out there, clean, logical, updated (mostly)... Bloomberg, CNBC etc feel too cluttered... Tech Ticker is a great idea (even with disgraced analyst Henry Blodget... at least he's honest now?). They need to keep working on these kinds of sites... integrate yahoo finance with etrade or scottrade type systems, banks etc. One stop shop.

Yahoo! Finance User
Yahoo! Finance User - Tuesday November 18, 2008 03:23PM EST

The first thing they should do is hire Johnny Ike and try to improve Tech Ticker...

Popat
Popat - Tuesday November 18, 2008 03:23PM EST

invent a car that runs on air. oh wait...

zxdfmlp
zxdfmlp - Tuesday November 18, 2008 03:23PM EST

Under Terry Semel Yahoo followed the approach of favoring advertisers in its search, and generally selling what advertisers wanted to buy. On the surface selling what people want to buy is not a bad strategy. It works fine for many companies. Google followed a somewhat different approach. It focused on what users wanted, such as relevant search results that don't favor advertisers. It drew a bigger user base, which in turn attracted (and still attracts) advertisers. Obviously, Google's way proved more successful. It is questionable if Yahoo can emulate Google and grow. They might be better off being a number two that is not a "me too" to a number one. Yahoo has focused on display advertising, big, flashy, and sometimes annoying displays. Google has focused on text based ads. I do think that Yahoo should put more emphasis on text ads.

zxdfmlp
zxdfmlp - Tuesday November 18, 2008 03:23PM EST

Under Terry Semel Yahoo followed the approach of favoring advertisers in its search, and generally selling what advertisers wanted to buy. On the surface selling what people want to buy is not a bad strategy. It works fine for many companies. Google followed a somewhat different approach. It focused on what users wanted, such as relevant search results that don't favor advertisers. It drew a bigger user base, which in turn attracted (and still attracts) advertisers. Obviously, Google's way proved more successful. It is questionable if Yahoo can emulate Google and grow. They might be better off being a number two that is not a "me too" to a number one. Yahoo has focused on display advertising, big, flashy, and sometimes annoying displays. Google has focused on text based ads. I do think that Yahoo should put more emphasis on text ads.

Squealer
Squealer - Tuesday November 18, 2008 03:32PM EST

Henry is like a babling bobble head. Blah Blah Blah. Like a little kid who likes to here himself talk, but doesn't really say anything.

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