Thursday, December 24, 2009, 2:30AM ET - U.S. Markets open in 7 hrs..

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

Yahoo! Finance User
Yahoo! Finance User - Tuesday November 18, 2008 03:36PM EST

dump henry.. how can you expect any credibility with him there.. it's embarrassing.. and a perfect reflection of what's wrong with america..it's like having Pablo Escobar in charge of the war on drugs.. then put a few links to more serious commentary...

Yahoo! Finance User
Yahoo! Finance User - Tuesday November 18, 2008 03:39PM EST

what happens to yahoo's stock price if it merges with microsoft? i have stock in yahoo. let's say msft offered 15$ per share... would that just mean yahoo's stock would start at $15 and i could sell it at 15$? anyone know? Thanks.

AndrewK
AndrewK - Tuesday November 18, 2008 03:39PM EST

Yahoo Finance is one of the company's very best features, and Tech-Ticker is one of the better features on Yahoo Finance, and in the long run the firm has to find a way to recoup the costs of providing this information to website viewers. It does not however follow that innovations in advertising are the only or even the best way of doing so. I, for one, do not read newspapers or magazines because of the glossy "content" rich ads. I tolerate the ads because they are worst a minor distraction while flipping the page as one does anyway. I suspect that if there were an easy way to replicate that experience on websites it would have been done long ago.

Yahoo! Finance User
Yahoo! Finance User - Tuesday November 18, 2008 03:45PM EST

What the next CEO of Yahoo needs to do ? Ask the Governmen for BAILOUT! What else?

TR
TR - Tuesday November 18, 2008 03:48PM EST

Johnny Ike Microsoft offered 33/share when yahoo was twice what it is now are you really saying yahoo should sell itself for 35 or are you just blind. The fact that their stock price is in a semi-rally is because Yang is a pig and he is finally gone, probably at the hands of Icahn. The first major hurdle is over now the board needs to get rid of the even greedier pig in Icahn and start focusing on its core business instead of focusing on who is going to buy them. The fact is that people only want to buy winners or at least companies that have the potential to be winners. Yahoo's only real advantage at this point is their finance section. They need to address that very big problem and make sure that they broaden their business and make it a more viable place to advertise. Gone is anything over 22/share, unless MSFT is stupid, and stupid they are not.

coats
coats - Tuesday November 18, 2008 03:55PM EST

"Focus on display: Better to shore up areas of strength than continue to fight a losing battle with Google over search." Is this blogger seriously suggesting that yahoo cut search from their services? Um, it's kind of their biggest money maker and um, although they're behind google (by far) they're still ahead of aol, ms & any other number of similar search services. Display is going well by all accounts but search the core of their advertising. Maybe they should get rid of their cell search programs too..Are we really saying that second place companies should just fold, because the first place will seemingly always be first place...Bye pepsi, see ya Mac, adios burger king. are we trying to make search a google-only business or what? C'mon. I can see cutting out some of the failed sections, the ones that arent' even worth keeping for advertising reasons,but i have to say that search is far from one of those. without search tou don't HAVE a yahoo...but maybe that was the point of your suggestions

Bill
Bill - Tuesday November 18, 2008 04:45PM EST

SELL SELL SELL SELL SELL !!!!!!!!!!!!!!!!!

Yahoo! Finance User
Yahoo! Finance User - Tuesday November 18, 2008 04:49PM EST

Cool. Jerry is gone... as CEO... but still exists on teh board and as Chief Yahoo (whatever the hell that is)... So for ANY new CEO to be successful he/she needs to be assured that Jerry and David are not running interference behind the scenes (which they are apt to do)... I do believe that despite what Henry and Mr Task talk about, you're not going to get "change" (seems to be a popular word these days) of what they describe unless Jerry and David go quietly into the night and are not heard from again - at least from the Yahoo podium (they lost all credibility with employees so would not be a negative in that aspect at all).

Yahoo! Finance User
Yahoo! Finance User - Wednesday November 19, 2008 02:23AM EST

The first thing a new CEO of Yahoo needs to do is separate analysts and shareholders views from users, however bad the PR has been in investment circles users are largely unaware of this. Yahoo is a very strong brand and the new CEO needs to concentrate on this, he needs to focus on new user benefits that compliment their loyalty in the brand, from allowing users to choose the design and elements of the page they see, to determining the kind of advertising they are exposed to. Advertising is not a dirty word, most of it can be entertaining and informative, true some online advertising is stale and needs to be liberated from the poor formats on offer. Display ads have a big future, eyeballs love intereactive content that entertains and informs, with the growth of Youtube and online TV it is obvious text is not the future online. Search is also redundant in it's present form, 7 zillion results generated in 10 seconds impresses no one especially when it involves another hour trauling through results to find something simple (how many times do users abandon a search because of information overload?). Things at Yahoo are not as bad as analysts would have us believe, search is not a measurement of users loyalty. As a brand Yahoo still has huge kudos with users, they still like most of the content and services, coming back day after day. So in short the CEO MUST stop any contagion from the bad PR generated by analysts spreading to users. Cost cutting is important from an operational standpoint (but let's not pretend LOOT (classified advertising newspaper) needs the same quality and quantity of staff as the Financial Times) so chopping staff blindly in line with Googles numbers may not be the best move in the long term if the two resources are destined to provide different user benefits (the new CEO may want to introduce performance based pay to reduce costs, linked to growth or stability in user numbers over growth in advertisers or margins?)

Yahoo! Finance User
Yahoo! Finance User - Wednesday November 19, 2008 09:05AM EST

Guys, I follow your videos daily and I really consider you my favs, but the comment you made today regarding display advertising and the fact that it has made no development in the last 10-15 years is one of the most inaccurate I have ever heard. Please have a look at the innovation to rich media technology brought by companies like Eyeblaster and Pointroll and then let's discuss it! ;-)

Dennis A
Dennis A - Wednesday November 19, 2008 01:51PM EST

Have Yahoo run the company instead of vendors/consultants/developers and FAQ's/Users.

Yahoo! reserves the right to refuse, or remove any comment that does not comply with the Yahoo! Terms of Service. The submission of spam, hateful, or obscene messages may result in the termination of your Yahoo! ID.
About Tech Ticker - Send FeedbackDisclaimer. Copyright © 2007 Yahoo! Inc. All rights reserved.
Copyright/IP Policy - Terms of Service - Privacy Policy - Help
Quotes delayed, except where indicated otherwise. Delay times are 15 mins for NASDAQ, NYSE and Amex. See also delay times for other exchanges.

Quotes and other information supplied by independent providers identified on the Yahoo! Finance partner page. Quotes are updated automatically, but will be turned off after 25 minutes of inactivity. Quotes are delayed at least 15 minutes for NASDAQ, NYSE and Amex. See also delay times for other exchanges. Real-Time continuous streaming quotes are available through our premium service. You may turn streaming quotes on or off. Fundamental company data provided by Capital IQ. Financials data provided by Edgar Online. Historical chart data and daily updates provided by Commodity Systems, Inc. (CSI). International historical chart data, daily updates, fund summary, fund performance, dividend data and Morningstar Index data provided by Morningstar, Inc. Analyst estimates data provided by Thomson Financial Network. All data provided by Thomson Financial Network is based solely upon research information provided by third party analysts. Yahoo! has not reviewed, and in no way endorses the validity of such data. Yahoo! and ThomsonFN shall not be liable for any actions taken in reliance thereon. All information provided "as is" for informational purposes only, not intended for trading purposes or advice. Neither Yahoo! nor any of independent providers is liable for any informational errors, incompleteness, or delays, or for any actions taken in reliance on information contained herein. By accessing the Yahoo! site, you agree not to redistribute the information found therein.