Yahoo's Yang is gone. That was the easy part
Restoring the fortunes of the pioneering Internet company takes a lot more than ejecting a high-profile executive. The rank and file, too, are key to Yahoo's fate.
Separating Jerry Yang from Yahoo is the easy part.
Yang co-founded the Internet pioneer 17 years ago along with David Filo, following the well-trodden path from Stanford student to tech stardom. But yesterday, stepping down from his "chief Yahoo" post and the company's board.
Yang has overseen, sometimes directly, years and years of weak performance as Yahoo squandered its early lead on the Web. That includes the 2008 drama in which Yang and Yahoo's board rebuffed Microsoft's $44.6 billion takeover offer, which in hindsight looks astoundingly generous.
So it's not unreasonable to guess that Yang was given the heave-ho now that.
And it's not unreasonable to expect the change will make it easier to implement major changes at Yahoo--divestitures, restructuring, private equity deals, for example. "We're not sure that Yang stepping down was necessarily required in order for a deal to get done...but Yang's departure from Yahoo could remove a potentially complicating factor," Macquarie Securities analyst Ben Schachter said in a note.
But there's a huge difference between evicting one potentially troublesome executive and fixing a mammoth company. I like to think of the challenge as the reverse of the Great Man theory of history.
Individuals are important in business, politics, and war, to be sure, but the Great Man theory ascribes way too much importance to their actions in charting the course of history. The deification of many successful CEOs, founders, politicians, and generals is frequently unwarranted. Too often somebody is in the right place at the right time, and merely not fumbling an opportunity isn't necessarily enough to justify credit for changing the world.
Great Man thinking is particularly hazardous in technology, which changes at a breakneck pace. Today's pie-in-the-sky idea becomes tomorrow's checkbox on a feature list. A clever videoconferencing idea, attempted too soon in the history of the Internet, is a dud because costs are too high and bandwidth is too low. Too late, and anybody can do it, so adding hangouts to Google+ is nice but not revolutionary. Not everybody can be Skype, which built up a large membership of paying customers by arriving during the sweet spot.
I'm not trying to belittle Skype's achievements, but I'm convinced that if that company hadn't done it, another company would have, because the circumstances were ripe.
Likewise, Yahoo, in its early years, did well transforming from Yet Another Hierarchical Officious Oracle to the starting point on the Web for millions of people. It wasn't easy, and there were competitors.
In the early days of the Web, Yang got a lot of credit. Today, he's getting a lot of the blame, implicit in the 3 percent after-hours rise in Yahoo's stock price that elevated its market capitalization by more than $500 million.
Call it the Great Scapegoat theory of history.
I'm not arguing that Yang is blameless. What I am saying is that fixing Yahoo will be a lot harder than hiring a new CEO (the company tried that with Carol Bartz, don't forget), turning over the board, and ejecting a co-founder.
Yahoo remains a collection of thousands of employees. Their collective performance, choices, and decisions helped get Yahoo into today's fix, and now those same employees must strike off in a new direction to help get Yahoo out of today's fix. They must be willing to assess Yahoo's strengths and weaknesses candidly, to see the lay of the land, and to embrace change.
Top management will set that course and decide on major restructuring, but much of the success or failure of tomorrow's Yahoo will come from those thousands in the ranks, not the very few at the top.