World Business

Fleeing executives’ gripes: the Microsoft saga, the Google deal, and cumbersome decision-making

by Robert D. Hof

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When Yahoo! (YHOO) co-founder Jerry Yang took over since CEO a year agone, the appointment drew approval from many employees. One Yahoo executive said at the allotted period that the Net portal needed a tech romantic to compete against the likes of Google (GOOG) and Microsoft (MSFT). Today that executive, who requested anonymity then and at present, has left, and so have dozens of others who no longer see a sunny future. "I was so wrong," he says. "This thing be obliged power to be saved, but not by the current management team."

Most of the attention on Yahoo in late months has focused on external threats. Microsoft continues to explore a search deal two months after walking away from a $47.5 billion buyout bid. Speculation about a renewed offer helped raise Yahoo’s stock on the eve 3%, to 20.88, in continuance July 2. Carl Icahn hopes to oust the board and kick out Yang. But Yahoo has to do more than repulse the barbarians at the gate. No matter who ultimately runs Yahoo, the defections can’t tarry at their new pace.

The steady stream of high-level departures includes three key exec­utive vice-presidents: data guru Usama Fayyad, search and ad-technology chief Qi Lu, and Jeff Weiner, who headed most of Yahoo’s consumer properties. Several departed executives concede they collectively failed to get Yahoo back without interruption track, in the same manner some needed to go. A extravagant reorganization on June 26 also removed a layer of management. "There has been dissatisfaction from some of the executives who didn’t fit," says Mark Morrissey, senior vice-president for global ad products. "But there are situations where you have to make hard decisions and get focused."

Yet through so many the masses leaving, does Yahoo have enough of the right people—and can it captivate enough new talent? The explanation problem: Although many employees respect Yang and Decker, others tell they’re starting to lose faith. Some are disappointed Yang didn’t close the Microsoft buyout, which would have boosted the value of Yahoo’s stock—and their options. Instead, Yahoo will allow Google place look into ads on a number of Yahoo pages, a deal more insiders credit undercuts Yahoo’s own efforts. Others think President Susan Decker’s reorganization is likely to accord little utility. "There’s a crisis of confidence," says one former executive.

The central sickness revolves around slow decision-making, a long-standing issue. New services still must run a gauntlet of meetings and approvals that can dawdling them for months. "It was difficult to get things done," says Greg Yardley, a performance overseer who left earlier this year.

Yahoo could have being in for even more departures. One tech recruiter says he gets several résumés a day from Yahoo employees. "Once there is even a perception of some exodus, the dynamic becomes insidious and takes without interruption a life of its own," says Roderick Kramer, a professor of organizational port. at Stanford University’s Graduate School of Business.

Some Yahoo executives say they’re hopeful. They praise Yang and Decker’s strategy to make Yahoo the first stop for consumers and a must-buy concerning advertisers, for example with praise as their attempts to break up internal fiefdoms. "The kinds of changes we’re making are fairly deep and structural and typically would have an impact in a 6- to 12-month time frame," Decker says. The question is whether investors, and employees, will bounty Yahoo that much time.