Yahoo's biggest problem is the creamy middle layer of managers. They are usually lifers (as in, been at Yahoo for a decade), or fresh MBAs with a Stanford degree who think that just because they sat through Management-101, they know how products should be designed.
This middle layer is like a Turkish harem. They're busy backstabbing each other, politicking and fucking things up. BUT NO ONE HOLDS THEM ACCOUNTABLE! Some dick will screw up a project, and then when the team gets laid off, happily move to another one to fuck that up too. Too often I've seen engineers just get disgusted and leave; or they'll go into a depressive "I don't care" mode. Passive-aggressive behavior is the norm.
Blake, when he joined, said that "we say 'no' to nothing, and 'no' to everything". What he meant was: in a meeting, the manager will say 'yes' to everything; but the moment he steps outside, he'll think "I'm not gonna do that!".
Innovation is also hampered by these middle morons. Someone tries to do something innovative, and a middle cockroach will crawl out, whining that his 'team' is working on it, and they'll have something ready in (some future quarter). So you're told to back off. Then you wait. In the meantime, that middle manager will use this opportunity to ask for more reqs and expand his little fiefdom. Time will pass, and nothing will get done. And you'll be waiting, agonizing, watching competitors eat Yahoo's lunch as this middle manager fucks around.
And then there will be cycles of outsourcing to Bangalore and Beijing. Some middle beancounter decided that 3 engineers in India can be hired for 1 engineer in the US. (Never mind the quality of people; it's just the 3:1 ratio that matters). So now they're busy outsourcing to Bangalore. Even critical support tasks are outsourced to Bangalore. So what used to take a couple of back-and-forth emails and get fixed in an hour, now takes 3-4 days.
The list of Yahoo's problems are long; and C-level people are not high on that list. "Vision" is also not a problem for Yahoo, if they'd just let the engineers just do their fucking jobs!
Carol's biggest mistake was pissing Jack Ma off and losing Alipay. A person at that level should never, ever, make such a blunder; and she had to go.
I am from Bangalore, And I seriously don't understand this Bangalore and Beijing hate.
Why do Americans assume all Chinese and Indians are fools? Aren't you people shooting yourself in the foot by assuming your competition is weak? Outsourcing works for a lot more factors than mere money. But money is a major factor.
Here in India, we have usual set of good and bad engineers like everywhere. There a lot of very good talented and hardworking folks here, sure they don't come cheap. But they come cheaper than what a similar guy in the US would cost. I have myself seen a lot of quality work getting delivered at almost 1/10th the cost it would have taken in the US.
The US taught us ideals of capitalism, didn't you guys want the world to follow your way of life. Now when we actually do, you guys frown.. withdraw turn your back on the same principles you have taught us for nearly half a century now.
You have nothing to fear from the bad engineers here, trust me they are loosing out very quickly. What you must fear is good hardworking folks coming at cheap prices. That will be a big problem, because when some one sees quality coming for cheap they will go for it.
Also, Indian is a huge buyer of military equipment from the US. We spend billions buying stuff from you. But we never complain that those jobs are being outsourced to America. In fact we love America for the help they offer us.
We live in a globalized world, this is how its going to be in the future.
I apologize if it appeared that I was hating on Bangalore (or Beijing). I was not. What I am against is outsourcing based on the simplistic math that you can get "3 for the price of 1" in Bangalore. When we give Bangaloreans(?) work based simply on price and not on their core competencies (and how the outsourced team will work with the rest of the company), then outsourcing won't work.
I feel that outsourcing should be done where it makes most sense. For example: if there's any work that needs to be done for the Indian (or South Asian) market, then by all means it makes sense to do it in Bangalore! Or if we have a team of engineers in Bangalore that are rockstars in Android development, then give them Android work!
Basically: outsource work to Bangalore if you know that it's the best place to do the work; not just because they're cheaper! I feel that Yahoo has been doing the latter.
It's again a corollary of the mythical man-month attitude. It looks like managers really can't understand that often, at least in software development, less is more.
The problem, kamaal, is that to get reliably high quality software engineers and designers in India you actually do have to spend nearly what you'd be paying in most of the US (the whole country, excepting NYC, Boston, LA, Bay Area, Seattle, and a few other hot spots) and it's much more challenging to recruit than it is in the US. There are problems with candidates cross shopping offers, professional interviewees, horrendous private sector communications infrastructure, governmental dysfunction, inflation, sexism, and familial pressure to strive for ever-increasing job titles in household name companies.
I don't mean to say India doesn't make sense, and I employ about 225 folks in Chennai right now, but it is apples to oranges and decision makers do not often have the right data to make informed choices over where to hire. As an example of something completely removed from quality of personnel, the time difference can wreak havoc on its own, especially when the stakeholders and developers are in different hemispheres. This holds not just for the development process but also in post-deployment support. It naturally (and unfortunately) leads to situations where the one or two engineers in the same general location as the stakeholders end up usurping the responsibility from the remote staff just out of convenient and self-consciousness of the 1-2 day lag they've been burned by over and over again. I could write a book on this subject (I've gone from being an individual contributor developer to a senior director reporting to the CIO over the last 7yrs and have seen nearly everything), but let's not belabor it. The executive summary is that offshoring is hard and too many managers only look at it from a direct labor cost perspective, which is folly.
Yes, we live in a globalized world and it will only continue to shrink. At the point where everyone has a phone or tablet with wireless unfiltered gigabit internet everywhere they need it, we'll be in good shape.
I've had the not-uncommon US developer's experience of working with useless bottom-feeding con artist outsourcers, the kind who throw out deliverables and then drag their heels explaining why there are still syntax errors in code which had allegedly been tested. I've also had the privilege of working with some really sharp people in Hyderabad—the difference is that we had to open an office there and hire full-time to find them. Nobody good wants to be a code monkey implementing somebody else's finished design by rote, and they have alternatives, so outsourcing is going to continue causing trainwrecks as long as western management insists on doing design and project management separately and only offers the least interesting (yet not idiot-proof) work.
Yes, I agree on this. There is a huge problem of hiring good folks here.
In fact most of the work coming to India is somewhat in an area where you are required to maintain and keep systems up and running. In other words a few feature additions but a lot of maintenance and bug requests.
A lot of work is also on the lines package management, something like working on SAP, or IT support or even testing projects.
I would like to know if majority of the developers in west would be happy doing those jobs. Because such jobs don't have a good career growth path. And price at which they do that here, is just unimaginable in US, I know.
I think one key factor in the average quality of workers found in North America and elsewhere is the social aspect of career choice. In North America there's a pretty strong culture of pursuing jobs that people are interested in and enjoy. From what I've heard about India I think that there are very different social pressures that encourage people to choose careers for other reasons. Maybe this is not so, it's pure speculation on my part.
However if we assume that a similar percentage of people will be interested in computers no matter where they reside then there should be more than enough quality Indian and Chinese devs lurking somewhere. Perhaps they are more easily lost in the bigger sea of devs, but similarly they should also shine and stand out that much more as well. Could it be that those hunting for the lowest price keep stumbling on the less qualified devs and then perpetuate the myth that devs in India or China are all lousy?
(edit: I'm unsure if there actually is a higher average quality of developer in North America, it may just be a perceived difference. Raise your hand if you live in North America and have met at least one "developer" who you cannot believe is actually employed as one.)
For a lot of time now, Engineering and Medicine have been the dream careers to chase in India, the reason is simple. Before the FDI reforms started in 1992, the only way some one could make it financially big in our society was through ancestral property, a big family businesses, or plainly doing your engineering and medicine and then settling down some where in the west(immigrating).
After the FDI boom, the IT sector here exploded. People from middle class background became millionaires in no time. In fact that's how Indian IT got a fat inefficient layer of management throughout the country. Very soon there was an impression that you have to get into software to earn that high. So the mad rush to get into software started.
This is where the quality dilution occurred. A lot of clueless people got promoted to be managers. Because technology was not considered a good career growth path. Also there is a mad rush here to visit some foreign country. These are generally called 'onsite' opportunities. Trust me, you have no clue what sort of politics runs across to get those opportunities. You have a lot of good developers but they never get their due. Neither rewarded nor appreciated properly.
Good developers don't sort of get the stuff they deserve here. But projects generally run on work by 'task masters'. In a typical team you will have few little really good folks and a little average folks the remaining hardly do their job. In fact when we talk of good devs that's the kind of folks that we are talking about here. But they are available in pretty good numbers.
Coming to manufacturing, IT support. That's really more of process and procedure based. So I won't comment on that, may be that's a difficult area to compete with. Because there you have very little intelligent things to do.
A tl;dr version of what you're saying, based on my somewhat jaded view of purely US based software development (I've worked with competent Indians based in the US but none of any sort in India) is that software development in India is all too much like it is in the US, exacerbated even more strongly by recent history.
We too had a "gold rush" period in the dot.com boom and even before that most people who call themselves programmer couldn't program (e.g. write code/solve a problem on a dry erase board). Far too much of our software development management is clueless (Dilbert is Revealed Truth and it was well established long before outsourcing became big), software development/programming itself is generally not well respected, etc. etc. etc.
The current US perspective on Indians is biased by the purely cost driven outsourcing craze, which made all of the above worse by the universal service business model race to the bottom, time zone and cultural differences (the latter is something that good management could help) etc.
We don't hate Indians per se (as mentioned, I've worked with some ones in the US every bit as good as any native born developer, even helped to provide one with a horse for his downtown Washington, D.C. wedding :-), we hate the system that's developed that results in our having to deal with very long turn around times for critical stuff, that all too often delivers us code that takes as long or longer to debug or re-write than it would have taken us do correctly in the first place, the constriction of entry level job opportunities and thus the long term career pipeline, how all this has aided the terrible age discrimination in our field, etc.
And certainly many of us "hate" the H1-B etc. visa systems that were established pretty much explicitly to drive down US salaries and replace US workers with cheaper foreigners. If you're like me and have been replaced at some point by an H1-B visa holder (a brilliant Jamaican who was very good at the job and who was not happy about how the company was exploiting him (he was making 60% of what I was making)) that hate of the system is also based on hard, cold reality.
OP is right. I am worked at yahoo till recently and I am an Indian and I don't think people in Bangalore or Beijing are bad. During my career in India and in US I met quite a few good engineers . In early days of Yahoo! India the quality of Indian engineers are pretty good. Off late they are just hiring whoever send in a resume. I know people who are interviewing these candidates even when they say no the manager is hiring because they have fill up the req. Its really sad state you hire these so called "programmers" who can't understand basic things and its frustrating deal with and explain every small details and the work that comes out is completely different from what you wanted and than some more delay.
No one complaining about American or Indian engineering quality I seen bad engineers on both sides. Its about getting quality engineer. If you remove pretty good engineers or team here and try to hire below average engineers from India only because they cost less than its really fucked up you are not really saving up anything in this only to realize your product is delayed for an year and it turned to piece of crap.
Don't be so defensive about these comparisons not everybody in India are great programmers nor they are fools
Partly true, however there is another aspect to it as well. It's just that Yahoo and other blue-label firms have an exalted notion of who should work with them. They tend to go for the fashionable set; the english speaking, high fiving crowd of self labelled developers who cant code themselves out of a paper bag.
I know of at least one "dynamite" programmer whom Yahoo! India rejected because the guy didn't have a graduate degree. As usual, he was too busy coding to go get a degree. Well guess what, it's been pretty interesting working with him.
I don't think it is hate as such, it's more on the management of the outsourcing than their ability. As is said if there isn't a good chain of communication between them and the employees back in the states things that used to be quick can take far longer.
There are also cultural differences that need to be thought about before sending across a stack of work for them to do. Also you can imagine if the employees in the US working in the same offices as managers had a hard time getting things done the outsourced employees would have an almost impossible time getting approval to change things.
There are problems, Yes I agree. Both cultural and communication problems.
But on a grand scheme of things when you interact with each other for something like 2-3 years. Those differences are negligible. When I started out, I faced similar problems. But I became friends with a lot of Americans, after our daily interactions.
You do get to hear about projects that fail. But they are small in number. There are so many successful projects here that running for more 5 years and some time even decades. To blanket say that you are never going to get good quality from there, is just not right.
This is a touchy issue, I understand as people are loosing jobs. I would be equally emotional if I lost my job. But self reflection is also important at the same time.
> Why do Americans assume all Chinese and Indians are fools?
Why are you jumping to that conclusion? All I read was how fucked up the management structure was and how Yahoo managed to consistently hire bad managers who hired bad engineers who drove projects into the ground. It just happened that they found a lot of bad engineers in India. (And you admitted yourself that there are plenty of bad engineers in India, just like everywhere else).
> The US taught us ideals of capitalism
"Do as I do not as I say" is perhaps the new motto. What we teach is propaganda. That is for bed-time stories for kids, not for the real world. If you look at how external trade, tariffs, protectionism, subsidies for our various industries work, you'll quickly understand that it is most definitely not a 'free' and 'open' market. When we say 'free' trade and 'globalization' we actually mean 'you open your markets so we can flood it with our companies' goods'.
> I am from Bangalore, And I seriously don't understand this Bangalore and Beijing hate.
Again, why do you say there is Bangalore hate? There is hate at bad management decisions. Apparently Yahoo has managed to consistently hit the majority of bad engineers and an ex-employee was watching his company's projects go to shit because of it. Dunno, seems like a valid thing to hate...
> What you must fear is good hardworking folks coming at cheap prices.
Hardworking is not good enough. Compensating by lack of knowledge by doubling the effort, and writing, 10x as many lines of code, is the wrong way to do it. It is a sure way to fail. In a more sarcastic way it would mean "When unsure how to proceed, just keep churning large piles of code!"
Programming is not picking potatoes. You cannot substitute 1 good programmer with 10 average ones. It just doesn't work that way. When you pick potatoes, you can say, if I hire 10 pickers and they pick x potatoes per hour then I'll get these many potatoes -- awesome. Programming is like composing music -- a hundreds average composer monkeys won't be able to compose a piece that one good composer can. It just doesn't work that way. It is inherently a creative process.
> In fact we love America for the help they offer us.
Sorry to disappoint, I seriously doubt genuine altruistic motivations are the cause of this "help". India might perceive it as such, but I seriously doubt that's how American (or any) external policy works.
It's not a hate of people. It's hate that is created by process. I worked on Yahoo Mail's frontpage section for awhile. While I was developing the newer version for more advanced browsers the older version was being developed by a team in banglore. As far as I could tell they were writing code just as well as we were. The reason I hated working with people in banglore was that we were on exactly opposite schedules. I would have days long fights about bugs over bugzilla because I couldn't ever just have a conversation. When we did have meetings they were always at the least awesome time like 8:00 pm on sunday night.
I don't begrudge them working in their daytime either. Why should an engineer have to work through the night. I just think it exposes a problem with outsourcing work.
I think it's also because we tend to see outsourcing as management-sees-devs-as-interchangeable-workers. If good devs in Bangalore/Beijing were given ownership of products and allowed influence over direction of things I'm sure they'd do great. But outsourcing seems to go hand-in-hand with a business creates requirements, devs follow orders attitude.
My friend you mean well. But there is a quality problem in India. There is volume (i.e. high numbers of engineers). But quality is bad on an average and that's the honest truth.
To prove my point. Let's look at the topcoder country rankings [At HN, perhaps I don't need to explain what topcoder is. But if I need to then in one word. Its a place where you practice Dynamic programming :-) ]:
The volume of engineers thing caters to service industry very well. And the service industry mainly thrives for one reason alone. Don't listen to all the jargon all the titans of industry say. The reason is only one:
And that is:
1$ = 45 Rupees.
Service Industry is good in a way that it helps people have financial independence in a matter of 2 or 3 years. But some how, it has stayed there. Is there an Infosys like product company in India?
So there is clear lack of vision amongst the leaders in Indian IT industry. In other words very few high quality leaders. And all seem to be quite happy with the success they have achieved and now out to serve the nation. ... I hope I get proven wrong and in a decade we have Infosys quality product companies in India.
So although xyahoo is gracious enough to apologize. In practice it may be the case, that some exceptions apart, you will get low quality engineers over here.
I think, its the culture, which has been the issue.
It can be fixed but few things need to be done:
1) People have to stop using IITs and IIMs in the same sentence.
2) B Techs at IITs should want to continue with Masters at IITs, and not apply to US univs
3) More entrepreneurs have to stop cashing out midway (I often wonder, could bazee.com have been India's alibaba?)
4) The entrepreneurs have to move from a trader mindset to a creator mindset
5) More creators have to do their own startup than just feel pride in working for Google/Yahoo/Amazon
6) The VCs (in general) need to speak like tech-educated persons. Not act like fools who would rather invest in Real estate (one needs to control their urge to spill coffee on their suits)
PS: I noticed that I went on a tangential rant ... completely off topic. But I speak almost all of the above from experience.
EDIT: Added some spacing to make the points readable.
>> I hope I get proven wrong and in a decade we have Infosys quality product companies in India.
A couple of honest questions. Do you work for Infosys? What exactly do you mean by Infosys quality?
About the 'low quality engineers over here' part, it's a topic already beaten to death. And you are true about the exchange rate part. In the end, with bean counters in control, that's what governs everything.
I have worked for Infosys in the past. Now, following the path advocated by PG :-)
I mean that for the IT services Industry in India, Infosys has set a benchmark - Most respected company; Billions of dollars in revenue;great set of leaders who started it. So I meant that in the product space also, there should be Infosys quality companies in India. Or the Googles, Amazons, Yahoos of India, if you will.
I hope people with the spirit of an NRN Murthy, will start lots of product companies over here.
Another point is that most of these companies "also" derive part of their revenues from non US markets. I am sure that adds to their profits as well. It would be very informative if someone could come up with those figures as well. It will add a lot more perspective to the illogical India-China bashing.
There is a big difference between leadership and management. Leadership is about taking risks, while management is about mitigating them. They are thus often in direct tension.
Yahoo had a lot of management and not much leadership.
Just a single data point, but I noticed similar antics even from outside the organization. My company licensed our software to Yahoo for several years, but they stopped using it six months into the contract. The projects kept running and we kept collecting data, but nobody ended up doing anything with the data. Employee turnover in this division seemed like 6-12 months, and to my disbelief the Harvard and Stanford grad managers I interacted with had no idea what was going on or what they were doing.
I certainly don't think the concept of losing scope over the course of an enterprise software license or a project's life cycle is unique to Yahoo, but these corporate inefficiencies have been a serious eye-opener.
> The list of Yahoo's problems are long; and C-level people are not high on that list. "Vision" is also not a problem for Yahoo, if they'd just let the engineers just do their fucking jobs!
I've got to disagree with this. No one inside or outside of Yahoo seems to be able to concisely state what Yahoo does. There are dozens of properties and various initiatives, but no real statement of purpose. There's too much confusion about direction, about what Yahoo's goals are, or should be. I don't think the internal guidance is clear enough, either.
I think this is a distinct C-level problem. And if managers aren't being held accountable, that a C-level problem, too.
Yeah, managers are like salesmen. Don't trust 'em, and don't blame them if they become loose cannons.
Managers typically do whatever gets them the best ratings. The C-level execs must be giving them misaligned incentives.
I'm not saying there's not great people who work in management, but once the environment starts getting toxic (due to bad managers getting all the resources, or even being promoted to the point where they are managing the good managers), the good managers will turn bad or flee.
The C-levels just need to look at stock performance and profit to see there's a problem. There is nothing that a director level person should be able to say to a C-level to make them feel comfortable.
Stock performance is a not a very good indicator, as it reflects emotion more than anything else. Profits and profit-margin, OTOH, are ones to keep an eye on all the time - whatever they do, you better know why they are doing it. If you lose control of both, you shouldn't wait for the chairman to fire you - help the board find a replacement and get out.
As joshu said, well put. You hit the nail on the head.
Of course, there was also a serious lack of vision and real leadership at the top as well, but that wouldn't matter with all the middle managers getting in the way.
Agreed; unshackle the engineers -- particularly if you want to compete with Google and Facebook, which have engineer-centric companies.
But everyone still needs to row in one direction.
What about this for a unifying vision? Help users discover, personalize, and consume content.
Be the service -- mobile or web -- people turn to when they have nothing to do, when they want to find a cool article, deal, song, video, picture, restaurant, conversation, or event.
Today, Google is where you go when you know what you want. Yahoo! could help people upstream of search -- before people know what they want. Which, conveniently, is most of the time.
Lots of companies tackle the problem in different areas: Digg with news, Pandora with music, Yelp with local businesses, Instagram with photos, Groupon with deals.
With content proliferating faster than ever before, there is a need for some service to help people discover and consume content. Users don't want to hunt for content. They want the coolest deals, music, shows, restaurants, and news to come to them.
Qs: What if you killed 90% of the middle management layer? Are the engineers motivated and talented enough to pick up the slack? Killing one layer would produce insane chaos and devastate Yahoo! in the short term, but could the freedom and responsibility drive engineers to care again? If not, what would?
I totally agree xyahoo. As soon as a high tech company pushes all it's techies off into the mushroom patch and forges ahead with marketers and promoters and B.S.ers leading the way it's all over. And I'm a big Yahoo fan. Followed it from the start and had one of the first @yahoo email addresses.
I left yahoo almost a year ago. My experience was that I didn't even know what middle management did. I refere to it as the cloud. There was me, my team, and my manager. Sometimes I would know who my managers manager was, but passed that I didn't really every understand who made decisions to do what.
This might be a middle management problem, I can't be sure. I don't think most people at yahoo can be sure.
"It's better to be a pirate than join the navy." - Steve Jobs
When I think of that quote, I usually think about it in regards to wanting to escape a big stupid company and form a startup, but that was not at all the context in which Jobs said it. He was telling this to the Mac team, which had become a kind of splinter group with its own identity within Apple. Of course, it's not just better to be a pirate yourself, sometimes the empire needs to hire some pirates. The navy can't be seen robbing Spanish ships after all (or devoting lots of money to zany projects like a graphical user interface on a personal computer).
I wonder if big dumb companies like Yahoo could actually use the pirate mentality/method to their benefit. Why doesn't Yahoo take a few million dollars in seed money and start a bunch of companies under its own umbrella using some of its own people? Give all the power to the engineers and the designers, skip the MBA-wielding drones that you've described above and let people that can actually make stuff set sail. Would it still fail? If any of the ideas did thrive, would the companies just be smothered when incorporated back into Yahoo? Would anyone even notice that a couple of million dollars went to creating several radical new projects?
and who would "Give all the power to the engineers and the designers, skip the MBA-wielding drones that you've described above and let people that can actually make stuff set sail."? Only the MBA-wielding drones are in the position to give [away] that power, and they are such drones for precisely the reason that they aren't able to skip themselves. C-22.
You just described every large corporation I have ever worked at. Middle management is backstabbing each other, while ignoring advice and ideas from the developers, and driving projects into the ground with no repercussions. I never understood that.
I disagree. The c-level people are responsible for Yahoo!'s problems, not the middle managers. The C-level people set the company culture and create the incent-structures for the middle managers to do their work.
This was a great diatribe against Carol. If you guys missed it from a couple of months back an angry shareholder confronts Bartz. He's dead on and with this now happening – absolutely right.
I guess that is typical in these big shareholder meetings, as in no attempt at a response? Sounds like they are all about saying everything is on track and not at all about the hard questions.
The problem is that Yahoo was born as a product that became obsolete quickly. It has no DNA anymore, it's just a collection of various media services. It's not a computer, or a piece of software, or a social network. It was a directory of web links. A library.
It's doubtful that a Steve Jobs could come back to Yahoo and get it back in touch with its roots. IMHO, their best bet is to sell.
I've always seen Yahoo as a "me too" company - the Carl's Jr of the online titans. If they've ever been the best at something they've never stayed there for long. The decline began when they decided search wasn't their core business and portals were the way to go. Who would want to work there? Even Microsoft are more innovative these days.
Having said all that, thanks for buying Viaweb off PG guys. At least some Yahoo cash went to good use...
I'm not so sure about this. The roots of a company run deeper than a product. The original goal of Yahoo! was similar in spirit to Google: help people make sense of the massive amount of information available on the web. They've of course gone in a wild array of directions since then, and I'm not sure they had as long a view of the web as Google did, but I'd be surprised if the founders don't have a good number of strong views they've held about how things should work online since the beginning. It remains to be seen if they can tap into the creative energy and focus that led Yahoo! to its early success.
Google, at least until the advent of Buzz and Google Plus, seemed to keep the user experience first and foremost (they're rapidly losing this vision).
Yahoo turned to face the siren song of advertising and eyeball aggregation, damn the user, by the end of the 1990s. Sure, some of their products may have shone (I was well off and away from their target userbase by that time) but as Diego said, the corporate DNA of organizing the Web, was lost.
There's an emotional connection that many geeks have to Yahoo: I know I'd still like to like it. If they made something that made us all go "Aaaaw....", we'd recommend the hell out of it, and soon enough it could replace Google News for some people, for example. And from that the next step would not be too long.
Imagine if they had a great news reading and exploring service integrated in a smart way with a reading list/book marking service - like del.icio.us? (ouch...) They have had great technology.
I agree, the best bet for current shareholders is to sell. But then what? It's still the acquiring companies problem and what are they supposed to do with it? At some point Yahoo will need to create products or make a market for itself.
That's true but given a brand name and an income stream there should be a way of reinventing themselves regardless of any roots.
I think it's really a people problem. Once the wrong people are in charge they keep replicating and it's very difficult to turn it around.
The only way would be for a buyer to come in, fire everyone who has ever made a product decision at Yahoo and replace them with a much smaller group of people who have a track record of creating successful products and who have no previous relation to Yahoo or the media industry.
Even in the early days their search index was run by a third party (OpenText, then AltaVista, then Inktomi, then Google, now Bing) and most of their major properties like Yahoo Mail and Store were acquisitions like Four11 Rocketmail and Viaweb.
Just seems like Yahoo has been a long series of acquisitions.
Yahoo was about organizing web sites in an easy to use hierarchical structure, not about searching. If you wanted to learn about "python" the programming language, you'd click computers->programming languages->Python and get a nice list of vetted sites about python. If you wanted to learn about python snakes, you'd click animals->reptiles->snakes->pythons and get another list of vetted sites about snakes. And back in the days when the web was small and search sucked, this was a great way to find sites. Yahoo has been floundering ever since the web grew too big for this approach to be practical, and Alta Vista worked out how to make search work.
I wonder if Yahoo! lacks the vision of a founder to compare with Gates, Jobs & Woz, Branson, Larry & Sergey, even Zuckerberg?
It's been described as listless and without vision or a clear direction for several years now. Particularly with more macro economic trends, now is a good time for CEOs and business owners to re-engage themselves and their teams with the original vision or intent of their business, to help confirm a new vision moving forward.
I've just never felt that Yahoo! had that baton handed to them by the original founders (I even had to search for their names - Jerry Yang and David Filo). Plenty of companies grow to enormous success without the founder having to drive it, of course, but there's usually some connection that links the CEO to the company's founding principles. Yang is still on the Board I believe - can anyone point me to where his thoughts on the direction might have been shared?
Don't forget – Jerry Yang actually returned to Yahoo! for a period. And completely fucked the dog, screwing up a potential acquisition and being replaced by Bartz. Say what we will about Valleywag, they covered this period pretty well:
He screwed the company's owners out of many millions of dollars. Microsoft may well have killed and gutted the fish, but the CEO's responsibility is to the shareholders.
I see what you mean. But let's say he would have sold to Microsoft and then Microsoft would have killed and gutted the fish, you'd probably be criticizing him for having no vision by selling Yahoo to MS and letting it die like that.
1. he sells for MS.
2. shareholders get some above average return in MS shares.
3. a bunch of companies buy some dismembered yahoo pieces like flickr, babelfish, etc
4. those companies pays more returns than microsoft in 5yrs.
6. everyone criticizes him for not being able to see ahead and costing the investors money in the long run.
Oh sorry, it's just you who can see the future?
...only icahn and pension funds wants companies sold to microsoft. I know I don't. Then you can argue that it's yahoo... so what, those people invested in yahoo. bet they feel the same as i feel for companies i'm investing.
Yang already tried the CEO role a couple of times. He was generally regarded as ineffective. He also sat on the board of Alibaba when the Alipay scandal went down. I don't honestly think he's where to look for the future of Yahoo. I'm not sure that he has a real vision for Yahoo.
Yahoo's issue is that they have no overall direction. They have some great assets in terms of employees as well as online properties. But what exactly does Yahoo do? They aren't a search engine. They aren't really a news site. They talk a lot about mobile, but don't seem to have a meaningful presence. They talk about local, but I'm not even sure what that means, and in any case they don't actually seem to be doing anything meaningful there. (You can't claim to be "local" and have such broken maps.) They seem mostly to be an advertising company, but they don't really identify as such.
They need to figure out what it is that they do, or at least what they want to do, and pursue that aggressively. Otherwise I fear they'll continue on their aimless path.
Yahoo needs someone who can clearly articulate what Yahoo does. There is no "product" to draft behind, just a disjointed set of technologies which individually are great (as someone pointed out, YUI and Hadoop, etc), but holistically don't have any focus.
Google had the same problem, but they are now shedding this.
Reminds me of my first meeting at Yahoo after I started at WBR.
I was a huge fan of delicious pre-acquisition and wanted to meet with Joshua to see if there was any way to tie music and our artist sites in with the service. I e-mailed him I think to setup a meeting.
We show up and our meeting is in the very, very back of the office in a conference room. Josh is there as well as a guy is his boss and another guy.
We find out this is the first time Josh had ever met his boss (this is about four months post acquisition) and the other guy didn't know why he was there, but the meeting had showed up on his calendar.
It was singularly awkward.
I used Yahoo back when it was still on the stanford.edu servers and called "David and Jerry's Guide to the World Wide Web"
I social engineered my way into the old wooden building when making a documentary on how people in the service sector were dealing with the "information super highway" in 1999 during a conference.
A lot of great people and great technology went into that company and came out of that company. I hope for at least legacies sake someone can figure out how to turn it around. The misguidedness is not new however, and I have lots and lots of stories from the last five years of dealing with them.
Yahoo produces a ton of content. I believe their Finance and Sports sites are #1. Autos is huge. Their news site is big. Their front page gets massive traffic. They have a ton of other sites as well. And this isn't spammy content farming. They really do have a ton of original as well as quality licensed content (e.g. AP stories). They do extremely well in the realm of content, and with audience engagement around that content. Add in Yahoo Mail, Personals, Answers (ugh), etc. They have a lot of very successful sites.
Yahoo Sports is an excellent sports journalism outlet and probably the only serious competitor to the ESPN monopoly. They broke the story on the Miami recruiting scandal, one of the largest NCAA violations in history, after doing extensive in-depth research.
I think yahoo mail. The feature diff between yahoo mail and gmail is not big enough to justify the switching cost for many people (lost archives, old friends and contacts need to be informed of email change)
The yahoo frontpage is still the starting destination for a large number of people. Without trying to draw conclusions about why people just like to use the frontpage as a jumping of place.
Why not ask the employees who actually WORK on their products what the heck Yahoo's vision for the future should be? Crowdsource the company vision so you don't have to rely on someone like Steve Jobs magically appearing out of nowhere.
Everyone has an opinion of what Yahoo should do, the union of which is the entire spectrum of possibilities. Perhaps this is even the cause of the downfall of Yahoo, as its vision seems to be to do most everything others have already done, but poorly. It takes a true visionary to see through the vast majority of these so-called potentials, say no to short-sighted revenue temptations, and make painful decisions. You simply can't crowd-source a Steve Jobs.
They do. There are numerous attempts internally at Yahoo to solicit feedback. I don't think they listen. Besides that people see such a sliver of what yahoo does overall that individual feedback like that can often be unhelpful at a corporate level.
A year or so ago, there was a survey done (we had such surveys every quarter) which asked the employees how much confidence they had in the top-level management.
The answer? Only 11% said they had confidence.
This is what our manager told us. She was so disgusted she didn't even share the summary that she was supposed to.
After that, they stopped the surveys. It's easier to kill the messenger, I guess.
Clearly Joe Stump is ready to step in if need be. His article is down right now, probably to many people trying to see if they offered him the job, but here is the google cache.
Ah, yes. The guy who doesn't understand the difference between market cap and cash on hand. It'd be awesome to have him as your boss, so you could witness first hand what it looks like when incompetent leadership takes a company from $12.50 per share to $0.
Ermm.. I'm assuming that comment is the beef jerky of humour: Very dry! In that case, haha! If not, then I suggest you check out the latest developments with AOL/TC.
You hit the nail on the head. Google seems to have figured this out by bringing back a product guy (Larry) to lead the company. And Google is still investing tremendous amounts of time and talent into innovation.
It is scary to see how these early winners in the online business have faltered. AOL, Yahoo, etc. Instead of fostering a culture of innovation, they've instead looked to cut innovation and attempt to use what remaining cash they have left to buy their way into businesses that they seem to always mismanage with "operations management". Take AOL and TechCrunch.
I disagree. AOL and Yahoo don't have someone like Jonathan Ive who is, for all intents and purposes, Apple's "product guy". Jobs was just the guy that focused and drove them all to excellence.
I used to work at Yahoo during the whole Microsoft debacle. I have to say that this is a disappointing development, namely because it really sounds like the board is giving up on Yahoo, and they will package up Yahoo to the highest bidder. It certainly sounds like the board is getting bored (pun intended) of trying to resuscitate Yahoo and would rather move onto newer and fresher companies with richer rewards. This unfortunately means more rounds of layoffs as they try to increase margins and profitability by hacking and slashing employees. I think in hindsight being sold to Microsoft was probably the best thing for the Yahoo, the employees, and for the shareholders.
A Microsoft acquisition looked attractive, but I would argue that a Google acquisition would be far better for both.
Google would foster a culture totally different from Yahoo's, and at the same time thrill the existing Yahoo employees - which means they would stick around. So much opportunity for both.
Microsoft is a great company, but their online businesses are losing money like crazy, and I suspect that many Yahooers would not be super excited about joining Microsoft.
What would Google gain from acquiring Yahoo? Yahoo has little search technology of its own and many services that overlap with existing Google services.
I think Yahoo's properties (and users) might be a better fit with Facebook.
Why would Google buy Yahoo so that Yahoo could obtain Google's talent? There is no way Google would water down its engineering pool with Yahoo's engineering staff.
You are right. The FCC does also approve some mergers, but those are mostly for telecoms. I think Google-Yahoo would fall under FTC jurisdiction (as well as the department of justice).
In all honesty, Yahoo! does a lot of things right, I hope for the numerous DOers still left at Yahoo! that they hire someone with the vision and effectiveness to make something out of the once great service.
I remember using Yahoo! way back in the days of Mosaic. Yahoo! has a long history (in Internet time) and many long-time and loyal users of it's email and other entertainment and lifestyle services.
Yahoo! has to break out of the "portal" mindset of trying to be all things to all people. When portals were the all the rage in the late 90's, options were limited in the online services space -- which is clearly not the case anymore. What Yahoo! currently brings to the table is talent, experience, traffic and a loyal user base of it's core services (e.g. Mail, Messenger, Finance, Flickr, Stores, Fantasy Sports, etc.). They need to integrate these services better by focusing on one core demographic and offering a more cohesive experience.
The first step is to identify their core demographic and build around their needs. They should raise cash for acquisitions through the sale of existing properties that do not service their primary audience. The Yahoo! brand and user base is strong enough to make a comeback, they just have to look at their company from a slightly different perspective and play their best hand in the current market.
She was dealt a tough hand. Very few firms have second lives and very few innovation firms can cost cut to greatness. Motorola is a more frequent outcome than Apple.
I worked for Sun in the Bayarea and for Yahoo from their Bangalore office. I found lot of similarities between Sun and Yahoo. Similar to Sun, the engineers at Yahoo were really really good. It was really disappointing to see engineers of so much quality not being used to their full potential.
If there is one good thing that could come out of this, it would be, if those awesome engineers were freed up to help create real value to our economies. I would hire an ex-yahoo engineer in a heartbeat.
I think the greatest example of what Yahoo! could have been is Yahoo! Japan. They own the auction space and as part of the juggernaut SoftBank group pretty much own a big part of the space (even more if you count the spun off Soft Bank Investments).
It's sad that lack of vision and truly ingrained technical innovation prevented the company from truly realizing the advantages of being a first mover in the space but they sure had a nice run for what started as a collection of links.
Yahoo! can still be turned around but it will take something more than a cost-cutting and downsizing mentality to achieve that. Under a leader with vision with buy in from the various department heads combined with the current traffic base of Yahoo as a launchpad would still be a force to be reckoned with.
Just recovering from the Bartz years will take a while, lots of talent has been discarded or they've left seeing the writing on the wall. Before Yahoo will manage to undo that damage there is a lot of work that needs doing.
First, the board should decide: media company or tech company.
If Yahoo! is a media company -- which is more conservative since its peers would be AOL, Viacom, et al., and not Google, Facebook, et al. -- then merge/acquire Netflix ($11.5B market cap) and anoint Reed Hastings CEO. Let him navigate Nethoo through the transition to new media. Combining distribution and content failed for AOL-TW, but with the media industry in flux and with more content surfacing from the grassroots, perhaps now is the time for vertical integration.
If technology, then Yahoo! needs a new culture and a bold vision to attract the most talented engineers. No ambitious engineer wants to slave under PMs when they could flourish in engineering-oriented companies like Google and Facebook.
Yahoo!'s mission? Help users discover, personalize, and consume content.
Be the service -- mobile or web -- people turn to when they have nothing to do, when they want to find a cool article, deal, song, video, picture, restaurant, conversation, or event.
Today, Google is where you go when you know what you want. Yahoo! could help people upstream of search -- before people know what they want. Which, conveniently, is most of the time.
Lots of companies tackle the problem in different areas: Digg with news, Pandora with music, Yelp with local businesses, Instagram with photos, Groupon with deals.
With content proliferating faster than ever before, there is a need for some service to help people discover and consume content. Users don't want to hunt for content. They want the coolest deals, music, shows, restaurants, and news to come to them.
Analyzing the web for the most relevant content -- no matter the type -- at a personalized level is non-trivial. Because it's a daunting technical problem, it will attract smart engineers.
Despite the naysayers, Yahoo! occupies an enviable position with massive assets: hundreds of millions of users, deep advertiser relationships, and an iconic brand. The question is how to organize these assets into a sustainable and promising company.
Yahoo! has the cash flow to acquire some pieces, perhaps go private, and execute against some vision.
There is an opportunity to once again innovate with compelling technology and recruit talented engineers. There is an opportunity to help users navigate the explosion of online content in a smarter, more natural way. There is an opportunity for Yahoo! to reassert itself as one of the premier companies in Silicon Valley, one led by pioneering technology.
Another nail in the coffin for the "A successful CEO's skills can easily transfer to any company" idea! From the top of my head (other than Bratz): Zander at Motorola, Sculley at Apple, etc. You just can't graft them on like that.
It might be true, though, that there is a large equivalence class of companies that can trade CEO's well, and interesting consumer tech companies are just not in that equivalence class. It seems like Coke and Levi Strauss could trade, for example, and be fine, or something.
Want to add Facebook stuff to your page? Sign the Facebook ToS, lube up, and get ready to get shafted. Want Google+ interaction? Same deal.
Facebook (and to a lessor extent, G+) don't want you to run apps that involve them. They want you to create content for users to "like".
Yahoo could create a great identity system - multiple identities (so you don't need to use your real name for everything), notifications (replacing email for web apps), payments, micropayments, advertising, the works.
Want to make a web app? Check out (the fictional) Yahoo.js, and the (fictional) native client for your server (or just make it all run on JSON as a fallback).
It could work like that. They just need to ask a bunch of people making new web apps what the pain points are, solve them, then use that to push people to a Yahoo Notifications page, and from there to Yahoo's other properties.
Stock is reportedly up ~6% on the news. Too bad the board couldn't have figured this out months ago. All she did was sell search to Microsoft. More or less the same as here modus operandi at Autodesk. At least that MS sellout gave ProEngineer a nice batch of customers. Her search sale helped nobody but did reduce the competition for Google's search monopoly.
IMO any Yahoo CEO who can't fix their flagship webmail within a year should be shown the door. Of course fixing webmail means fixing middle management, and that's a rather more difficult problem.
Im surprised it took so long to fire Carol. As I saw Yahoo selling off all of its cool properties that were distracting to its core, I wondered what exactly their core was. It seems like yahoo was eager to become a bunch of links and licensed content...someone must have relied too much on an excel sheet to figure out how yahoo could become a valuable company. Though Yahoo lost many valuable properties like yahoo dating while others like yahoo maps failed to innovate, I look at what Yahoo did with the news on its front page as indicative of the company philosophy. They put sensational news on the front page begging for people to click the links. Many of the headlines are deceptive as the articles themselves are a let down. Its almost as if the yahoo content team waas trying to trick users to get a few more pennies out of banner ads and lose clientele. Many times I have read comments of users making fun of the writers. Im not sure what yahoo's plan is but if I was the bored I would donate 25% of the company equity to Mark Zuckerberg and another 26% to the Page and Brin and send a box of chocolates and a plea for help. :) I wish Yahoo the best but its going to take a lot to change their culture.
Not holding hope that the next person will do much better. It sad considering how talent they still seem to have. Looking at the Yahoo UI people and the people behind hadoop. I'd like to see them push web applications more. They seem to have the people to build good web apps. They never did anything with Zimbra an awesome product and instead sold it to VMware. Those kinds of things are what they could I my view do well in.
Carol never clearly defined her strategy as CEO. It wasn't clear to her employees and it wasn't clear for investors. She may have had some big picture plan that would taken many years to achieve, but it didn't look that way.
It was clear that board wasn't willing to wait to find out. Which ever direction they go with a new CEO, here's hoping for an actual plan.
The sad thing is they have all the parts to make a great competitor to Facebook, Twitter, and Google+. Some sort of messaging to strap their news, financial, flickr, etc. together into something compelling. They still have amazing front page traffic.
Yang already had his shot at a Jobs-like return and he botched it miserably. Worst of all, he messed up Yahoo's chance for an acquisition, which at this point seems like the only way it can actually generate some value.
Speaking from experience there, Yahoo! will do better without that kind of "leadership" up top. Let's break Yahoo! up into its valuable components, sell it and shed the rest.
I would never dream of selling a company to Yahoo.
I don't build to flip, so seeing what they did with Flickr, Delicious and dozens of other projects (internal ones, too: SimpleGeo is proof that FireEagle should have gotten a major push out of the gate) makes me feel a little bit like Joss Whedon contemplating doing another show with FOX.
Does anyone have any compelling counter-arguments, or believe things will ever get better? Is Yahoo in AOL/NAMBLA territory at this point?
Not to many people would want to punish Jobs in this way but it is the only important question. How would Jobs run Yahoo? Well, he wouldn't have mortgaged the search; he would have demanded that it be the best.
Yahoo's biggest problem is the creamy middle layer of managers. They are usually lifers (as in, been at Yahoo for a decade), or fresh MBAs with a Stanford degree who think that just because they sat through Management-101, they know how products should be designed.
This middle layer is like a Turkish harem. They're busy backstabbing each other, politicking and fucking things up. BUT NO ONE HOLDS THEM ACCOUNTABLE! Some dick will screw up a project, and then when the team gets laid off, happily move to another one to fuck that up too. Too often I've seen engineers just get disgusted and leave; or they'll go into a depressive "I don't care" mode. Passive-aggressive behavior is the norm.
Blake, when he joined, said that "we say 'no' to nothing, and 'no' to everything". What he meant was: in a meeting, the manager will say 'yes' to everything; but the moment he steps outside, he'll think "I'm not gonna do that!".
Innovation is also hampered by these middle morons. Someone tries to do something innovative, and a middle cockroach will crawl out, whining that his 'team' is working on it, and they'll have something ready in (some future quarter). So you're told to back off. Then you wait. In the meantime, that middle manager will use this opportunity to ask for more reqs and expand his little fiefdom. Time will pass, and nothing will get done. And you'll be waiting, agonizing, watching competitors eat Yahoo's lunch as this middle manager fucks around.
And then there will be cycles of outsourcing to Bangalore and Beijing. Some middle beancounter decided that 3 engineers in India can be hired for 1 engineer in the US. (Never mind the quality of people; it's just the 3:1 ratio that matters). So now they're busy outsourcing to Bangalore. Even critical support tasks are outsourced to Bangalore. So what used to take a couple of back-and-forth emails and get fixed in an hour, now takes 3-4 days.
The list of Yahoo's problems are long; and C-level people are not high on that list. "Vision" is also not a problem for Yahoo, if they'd just let the engineers just do their fucking jobs!
Carol's biggest mistake was pissing Jack Ma off and losing Alipay. A person at that level should never, ever, make such a blunder; and she had to go.