Silicon Valley Watcher - Former FT journalist Tom Foremski reporting from the intersection of technology and media

YHOO news analysis: GOOG is setting the pace as Yahoo faces identity and leadership crisis

Posted by Tom Foremski - December 6, 2006

By Tom Foremski for Silicon Valley Watcher

Yahoo's hastily engineered reorganization does away with key leaders within the company:

Chief Operating Officer Dan Rosensweig and Lloyd Braun, the head of Yahoo's media and entertainment group, are leaving the company, Yahoo spokeswoman Joanna Stevens said. John Marcom, senior vice president of International Operations, is also leaving the company "soon," she said.

Two top Yahoo execs to leave in reorg Tech News on ZDNet

Dan Rosensweig has earned a tremendous amount of respect in this industry. He is one of the few top executives that is able to garner so much positive sentiment from other senior execs. My ZDNet colleague Dan Farber at ZDNet worked with him and is one of his staunchest supporters:

Yahoo's Dan Rosensweig heading off for new adventures
My colleague Larry Dignan as well as many others (see TechMeme) have already covered the news about the management shake up and reorganization at Yahoo. I checked in with Dan Rosensweig, the Yahoo COO who resigned as part the reorg. Dan and I go back more than a decade. ...
Posted by Dan Farber in Between the Lines on: Dec 6, 2006 12:52 AM

 

I worked with John Marcom at the Financial Times and he was easily the most impressive executive in that organization. He had a keen understanding of what was achievable and realistic. When he left the Financial Times and joined Yahoo, that shook my confidence in the remaining management team.

I met with Mr Marcom late last year, he spoke about life at Yahoo, how the growth of the business was exhilarating, it felt like being on top of a galloping horse without a saddle. Clearly, that galloping horse somehow slowed lately and the reason seems to lay within Yahoo rather than in the broader market.

Yahoo's leadership crisis and reorganization is directly related to Google's fast paced growth. YHOO's performance would be considered very good against any other metric, but in comparison with GOOG it seems lackluster.

Google's business model is far more efficient because it has shown that using servers and software provides a far more scalable media business than that of Yahoo, which has pursued a hybrid approach relying on a human-plus-machine business model.

Several times, Yahoo has ventured into producing some of its own content, such as its Yahoo Finance video Internet channel several years ago. And more recently, with Patrick Houston, and other journalists brought in to create original content.

[Please see: Yahoo gets content . . .but can it make content?]

Google prefers to create content with machines. It sends out spiderbot armies to harvest content from the open Internet--content created by people but not by Google's people. Someone else is paying their salaries.

What is very troublesome about all of this is this: If Yahoo has trouble competing against Google then what hope have traditional media companies?

Remember, Google is a media company, it publishes pages of content and advertising.

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