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

Web 2.0 growing pains as Technorati cuts staff, CEO exits

Posted by Tom Foremski - August 16, 2007

David Sifry today stepped down as CEO of Technorati, the search engine for the blogosphere, after several months of being unable to find a replacement for himself. He stays on as chairman of the board.

Mr Sifry said on his blog:"As of today, Teresa Malo, CFO, Dorion Carroll our Vice President of Engineering and Derek Gordon, our Vice President of Marketing, will operate as a committee of the Office of the President."

He also announced job cuts:"today we also say goodbye to eight of our team members. Because we'll be focusing our efforts more precisely moving forward, it became clear we needed to adjust our expense structure to be more appropriately aligned with our priorities moving forward."

Link to: http://www.sifry.com/alerts/archives/000508.html

Foremski's Take:

It could be that Technorati is being dressed up for sale. Cutting operating expenses and bringing in a new CEO are classic ways to boost the value of the company.

Yet it seems strange to be cutting the development team and focusing on bringing in sales people because Technorati's infrastructure has been problematic. The service can sometimes be patchy and unavailable.

Also, does this show that development teams in Web 2.0 companies are disposable? This is what happens in the video gaming industry, the game development teams are laid off once the product is completed and it goes into testing and then deployment. After all, why have software engineers hanging around once most of the heavy lifting has been done. Just hire them back again for the next project.

I'm not saying that this is what Technorati has done, but it is a tactic that is often used in Silicon Valley.

New Skill Sets

Greg Gianforte, CEO of RightNow Technologies is a serial entrepreneur and I remember a conversation a year ago we had about startups. He said that the team you have when you run a startup, is not the team you need two years or so later.

He said it is terribly difficult to make that transition. He once "refreshed" more than 40 people, almost his entire startup team. He said that it is difficult to do because these are people that worked hard, stayed up all night, and built the company from scratch and there is a tremendous sense of loyalty to them.

But, the skills needed to build the company from startup are not the same sets of skills needed two, three years later. It makes no sense to keep people in roles for which they are unsuited and will likely fail at. It is better to let them go so that they can continue to do what they are good at, somewhere else.

That's what is happening at Technorati, and at many other Silicon Valley startups.

(Hat Tip: Chris Heuer)

Here is Dave Sifry being interviewed on San Jose Mercury's Inside Silicon Valley - May 27, 2007:

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