DealZone

Chicken-and-egg time at Yahoo

June 20, 2008

chick.JPGA story in The Wall Street Journal about Yahoo’s “reorganization” plans even as executives are leaving had us wondering which came first, the reorganization or the departures. The cynical might envision two scenarios:

Scenario 1: Yahoo begins hemorrhaging executives the week after it chooses Google over Microsoft. Investors, already mad at CEO Jerry Yang and the board for not cutting a deal with Microsoft, are likely to see the loss of top talent as a fallout. So Yahoo decides to do some damage control by “reorganizing” its various products, such as mail and messaging, into something more centralized, and indicate that as the reason for some six departures this week.

Scenario 2: After failing to strike a deal with Microsoft, and with investors less than thrilled at the Google partnership, Yahoo needs to do something to show the world it’s worth more than $47.5 billion. It dips into a fast-depleting bag of tricks and pulls out, wait, a “reorganization” plan we’ve sort of heard before. Executives shake their heads, worry that may not save the company and that they’re better off as venture capitalists (or maybe they’re considering job offers at Microsoft), and begin deserting.

So which came first, the chicken or the egg? Send us your thoughts.

(Photo: Reuters)

Comments
2 comments so far | RSS Comments RSS

I vote for Scenario 1. In a similar position, the failed acquisition would make me made enough to leave. I have a hard time believing an announcement of a reorganization would push me over the edge if I’d already been on board as long as some of the executives.

Posted by ed | Report as abusive
 

I think Yahoo is just a brand and commodity play unless there are disruptive technologies (and therefore opportunities) to find a new high. Why would you still rule out a strategic partnership? Selling out to Microsoft can still remain a Plan C

 

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