|November 18, 2008|
|Hubris of Yahoo CEO Knows No Bounds|
|By Kevin McCauley|
|Jerry Yang, co-founder and CEO of Yahoo, has decided to call it quits to concentrate on his new role as "chief Yahoo," whatever that means. |
Shareholders rejoiced over Jerry's decision to pack it in.
Rather than preparing a bust for the Silicon Valley Hall of Fame to mark his massive achievement of getting Yahoo up and running, Yang now slithers from the corporate stage. His stubbornness surrounding a refusal to negotiate in good faith a takeover bid from Microsoft has forever tarnished Yang's reputation. [Full disclosure: this blogger has never owned directly a single share of either Yahoo or Microsoft.]
Yang is guilty of pride of ownership, putting personal goals and emotions way ahead of what is best for the enterprise and people that it employed. An entrepreneur like Yang never wants to sell out to an "evil empire" such as Microsoft. Life, however, is hard. Personal preferences must play second fiddle to the greater good, especially when you are not holding any aces in your hand. Yahoo was a lot bigger than Yang. It is now vastly diminished.
Yahoo is yesterday's news in the fast-moving technology world. It is toast. The 40-year-old Yang is responsible for the sorry state that the Google laggard finds itself in these days. Jerry's "just say no" response to Microsoft's $47.5B takeover offer for Yahoo has left the company in the deep hole that it finds itself in. That Microsoft offer was pegged at $33 a share, a far cry from the current $10.63 price that Yahoo stock is currently trading for.
Yahoo is paying dearly for Jerry's grand hubris. His back-up plan, an advertising program with Google, has now collapsed and the former high-flier is laying off workers as fast as it can issue pink slips. Jerry, at least, has a gig for now.
Yang's resignation highlights in boldface what is wrong with Corporate America. He should have been canned by the board for stiffing last year's Microsoft offer.
The board was a patsy. Where was Yahoo's management-loving directors such as Gary Wilson, ex-CEO of Northwest Air; Ron Burkle, supermarket magnate and dear buddy of Bill Clinton; Eric Hippeau, former CEO of Ziff-Davis, and Vyonesh Joshi, executive VP at Hewlett-Packard?
They will now go crawling to Redmond, Wash., to beg Microsoft CEO Steve Ballmer to renew his acquisition bid. That bid will be a fraction of the original offer, which will be Yang's sorry legacy.
Activist investor Carl Icahn pressured Yang to accept the Microsoft bid. He won a battle with Yahoo, which placed two allies on the board: Frank Biondi (ex-CEO of Viacom) and Mark Chapple (president of Hawkeye Investments) during the summer.
Icahn lost then, but now smells like a rose.
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