January 18, 2012, 11:20 AM — I was almost finished with a longish piece about Jerry Yang resigning from the Yahoo board of directors when my copy mysteriously disappeared.
I'm sort of pissed about it, so rather than try to recreate the post word for diplomatic word, this version will be more to the point: Jerry Yang took the thing he built from nothing in his Stanford University dorm room in the mid-'90s and turned it into a blobby, incoherent, and probably doomed mess.
This was accomplished in two ways: 1) Yang and his fellow board members made idiotic CEO hires, and 2) the company failed to carve out a viable role and identity in the emerging social/mobile Internet world.
Hiring a Hollywood executive (Terry Semel) with no Internet experience to be chief executive, as Yang and the board did in 2001, was dumb. Hiring another executive with no Internet experience (former Autodesk CEO Carol Bartz) in 2009 was even dumber. Neither one knew what they were doing. Carol Bartz couldn't even articulate what Yahoo is (though it's not likely that anyone could by the time she was running the show).
But those are the people Yang and the board selected to lead Yahoo into battle against Google and, later, Facebook. We've seen how that's turned out -- flat revenue, flat stock price, lower engagement. Semel and Bartz both were fired, with no permanent replacement lined up in either case. (New CEO Scott Thompson of PayPal was hired in early January, four months after Bartz's ouster.)
Yang's biggest blunder, however, will always be his rejection of Microsoft's $44.6 billion offer in January 2008 to buy Yahoo. Yang and the board dismissed the bid as insultingly low, even though it was more than 50% higher than Yahoo's market cap at the time (and twice what the company is worth today).
Yes, hindsight is 20-20. But also remember that at the time of the offer, Yahoo was already in full drift. It had no permanent CEO (Yang doesn't count) and no realistic strategy beyond "Yahoo has incredible assets and a talented workforce, blah blah blah." Why wouldn't it take what was an extremely generous offer?
Now Yahoo is again seeking a buyer, but is having problems generating interest. Yang's departure probably is meant to help, and we soon may see other board members resign. If so, however, it's coming about four years too late.
Shares of Yahoo climbed to 15.99 in early Wednesday trading, or just 3.6% above Tuesday's close, before drifting back down to 15.75. Sounds like Wall Street also thinks Yang's departure is too late to matter.