09:46 AM

Should Semel go? Is Yahoo a media company? Is that a good thing to be? (Yes, Yes, No.)

So GigaOm posted this piece on Thursday, based on Yahoo employee Jonathan's Strauss' verbatim transcript of Terry Semel's post-reorg talk to employees. Read it at either of those blogs. The essence is this: Reports of Yahoo's - and Semel's - demise are greatly exaggerated.

Strauss' post is combatively positive. He says he and many other yahoos are hugely inspired and excited by the reorg.

As someone who has witnessed many of Yahoo!'s dysfunctions first-hand, I am frankly surprised at how right on they got it with this re-org. The changes that were announced this week and the ones that will come over the next few months are pretty much exactly what I think needs to be done to enable Yahoo! to realize its full potential.

Strauss defends Semel as a leader of "resilience, defiance, and strength." He adds that Yahoo needs not a geek who wrote some cool code when he was 25 but "the guy who spent 25 years climbing the corporate ladder all the way from the bottom to become arguably the most respected leader in one of the most cut-throat businesses in the world."

That's as may be. My gripe is with this sentiment - more crucial than whether Semel stays or goes:

I hate to break it to all of you, but the Internet isn't about technology. Cisco is a technology company, Yahoo! is a consumer services company -- the fact that those services are delivered via IP is just a detail. The people who fault Terry for not knowing how IP switching works might as well have criticized Ted Turner for not knowing how to install a cable head-end. Technology savvy can be hired (and I won't defend Yahoo!'s track record on that), but true leadership is something more.s a *huge* step in that direction.

Om says it this way:

A few days ago, Robert Young had noted that “If you strip away all the layers that make up Yahoo, what you’ll find is the Internet’s largest communications and community company.” I personally think of Yahoo as a consumer brand, not a technology company. Yahoo is a media company. It knows how to aggregate content pretty well, and it has the audience & has the ability to monetize it well6.

And that it can offer communications tools is a bonus - and barrier to entry. Hopefully after the reorg, they realize this, and drop all the pretensions about competing over search with Google which says its mission is to organize the world’s information. Yahoo’s mission aggregating all the “relevant information.”

So ... obviously technology, communications and media are bleeding together at pretty rapid clip. It's not entirely clear what the distinct words mean anymore. We're not talking about Cisco here, though. We're talking about Google. Media companies basically spend as little as possible on content, as much as possible on marketing and make money by monetizing (generally through advertising but also through user fees and sleazier models like product placement) the audience they are thus able to coalesce. That is the very definition of Yahoo's model.

A technology company on the other hand starts from a single basic technology, extends and scales as possible, and derives products and services on top of it. That's a pretty accurate recap of everything you've heard Larry and Sergey and even Eric say about Google.

Sure there's overlap and bleeding between the two models, but that's basically the split. Google's advertising business is a leverage of its underlying technology. Yahoo may copycat the model but at core, Yahoo advertising is about putting ads on content.

All of which is just to say I'm in agreement that Yahoo is a media company. But here's the rub. Being a media company is the wrong place to be. Media companies create, license and otherwise aggregate content. But there's far, far many more content producers on the Web than Yahoo will ever pull together. And even though they're being good sports and buying up Web 2.0 companies and investing in user-created content and metadata, trying to bring it all under Yahoo's roof is a dead-end run.

At end of the day, we don't want a walled garden. We don't want the best of the best. Most Yahoo services aren't the best anyway. What you want is great ways to take everything and move through it, find what you need to find, be delighted by what you discover, and have pathways coming in that share what others have found, added to, created. Or so it seems to me.

Google has the leading solution to that problem and it's basically gravy that its solution also involves the spewing of Google branding on practically every blog and search-enabled website out there. YouTube is to some degree an aberration, a content buy in the Flickr model, not the Yahoo/Hollywood model. But that just shows the depth of Yahoo's problems. It's not just that Yahoo is a media company in an age of technology companies but that it's not even competing when the battle comes to its domain.

In what area, exactly, is Yahoo #1? And if there are any such areas, what is Yahoo's exposure to a technological loss of leadership?

No, if Yahoo is to prosper it will need to shift towards becoming a technology company, one that can compete for the best brains in the world, one that makes technologists believe this is a place where they can change the world. And it needs to come up with some tech breakthroughs. And for that, Semel is clearly the wrong man for the job.

One more thing: Yahoo also has to be a place where people are proud to work. And that means: NO MORE COLLABORATION WITH REPRESSIVE REGIMES. Another reason Semel is wrong.