It was a total kick to hear that Neeraj Khemlani, Yahoo's general manager and executive editor of news (appointed by Scott Moore) is heading to the Hearst Corporation as a VP of Digital reporting to Frank Bennack, who has been acting CEO since the summer.

Bennack is quoted as saying:"Hearst's major operating groups have all made substantial progress towards our corporate objective of fully participating in the digital transformation. The creation of this new position is designed to accelerate the progress through greater cooperation and synergy across divisional lines. Neeraj is uniquely equipped to help me and my colleagues realize that goal."

And Neeraj is quoted saying: "I am delighted to join Hearst Corporation. We are witnessing the reemergence of content and media driving value in the new world and Hearst is uniquely positioned to realize that value across multiple digital platforms and distribution points. Remember, we're only in the second inning of the Internet. Hearst, with all its assets and investments, expects to take a commanding lead by the seventh-inning stretch."

Can I be allowed a cackle, or a least a translation from the corporate-ese?

For those who might like to deconstruct this press release, let me offer my opinion of what the real statements are:

Benneack deciphered: "Cathie Black has a whole division with more than 20 people, headed by Chuck Cordray, and the Newspaper group has another team, headed by Lincoln Millstein, and then there is an M&A group, headed by Scott English, but none of these teams is getting us digital media revenue and revenue optimization quickly enough. so I am going to hire this fella from Yahoo! out in Silicon Valley to come in and get me more money."

Neeraj deciphered: "I understand I am moving across the country and leaving a company whose stock is at $12.00 to take a job where I have no one reporting to me, but I have done this before and I am reporting to the CEO, so the future has great possibility."

As for where this leaves Yahoo!, I feel badly for Hilary, who is now losing someone she knows who could have continued monetizing content for her, but so it goes, right?

And this is a perennial Yahoo! problem--they bet on people who don't respect them enough to stay.

Over and over.

Note: Nice piece by Staci Kramer at Paid Content interviewing Neeraj



 

What a difference a year makes! A year ago I was at Yahoo! (just about to be part of a layoff). That Valentine's Day, Yahoo! Personals had the billboard in Times Square and in Los Angeles, and the home page, aka front doors of Yahoo had all sorts of highlights and pointers to the site.

Not any more.

Not only is Y!Personals not getting ANY special treatment on the home page, it's MIA from the Yahoo! billboard in Times Square--and I stood and watched the ads for 5 minutes, just to be sure.

WTF?

Clearly, Y!P is being treated as an end of life asset by management. (Sigh)

Former Yahoo! Santa Monica guy Scott Moore is heading back to his previous corporate employer, Microsoft, to run their internet business, says Paid Content, adding the news will become public on Monday.

My favorite quote in Staci Kramer's story, echoing a quote from an earlier piece, is that corporate people don't usually go off into start-up land, despite noises they make to the contrary. The exact quote: "othing hard and fast to it, but the longer someone has been in the system, the less likely it is that person will leave for good--unless they can't find a suitable spot. Moore was at Microsoft for a decade before he moved to Yahoo."

Next question: What is happening with the Santa Monica content business--as opposed to the Front Doors team-at Yahoo?

A friend of mine spoke to me this week and said s/he was doing focal reviews at my old employer, Yahoo!  "You know what that's like," L said, and then there was a pause. "Only, it feels kind of different because we're not giving anyone--anyone--raises, or promotions."

Welcome to 2009, where having a job is enough of a reward for working your ass off. Especially at Yahoo! where the belt-tightening has to deepen, still.

My friend is expecting that much of the team is already looking around; a few are waiting for the other shoe to drop, i.e., in 3 months, will they still have jobs? Meanwhile, on Yahoo's careers website--there are jobs listed--but 85% of them are marked "Future opportunity" meaning we won't be hiring anyone until the bloodletting is done.

Now that Carol Bartz is on board at Yahoo!, I'm sure she's meeting all the senior people and getting presentations of all the 2009 plans and the critical investments. Having lived through more than one change of the guard at Yahoo!, I'd counsel Carol to consider the following:

1)  Optimize premium service revenue
Who can you bring in-or bring back--to help optimize revenue from your premium services businesses? Have Small Business, Personals & flickr--three businesses with healthy paid services--been managed optimally, with the right investments (I think not). If you can add 8% to your revenue stream from these products, you'd see a very healthly number that would off-set concerns about your knowledge of the ad market.

2\) Reconsider local, local ad revenue and self-serve advertising.
What's the ROI to date on Yahoo's latest attempt to capture this holy grail? Unless you have the data that says yes, this may have been another huge investment on a nut Yahoo! won't crack.

3) Differentiate your advertising. Consider what to acquire to beef up strategic targets and markets.
Want women? Roll Shine up with some new properties. News? Clean up the mess in Santa Monica--that group has been left to wander in the desert for way too long.

4) Do NOT sell search for 100 days
Search makes Yahoo! a complete portal--and selling off the search business bit by bit was one part of what helped scuttle Netscape (of course, another part was getting rid of the Netscape search team!)

5) Be bold and pragmatic all at once
Yahoo! has made so many decisions by committee and concensus in the past few years, not always to its benefit. Have a vision and a strategy--and work from that, not committee-speak. Put eight senior execs in a room and they can talk themselves into anything. Don't go there.

6) Ask--and meet--the rank and file and get their ideas
That "NO" culture means that there are dozens, maybe hundreds of ideas filed away that could make things better or create new revenue and user engagement. Once you have a strategy, turn these folks on it--good will come out of it.

Great post over at DealBook by Jack Flack, aka Paul Pendegrass, deconstructing the Yahoo press release on Carol Bartz' appointment and reading between the lines (and into the backstory). Basically Flack says that the board choose her because she can sit at the table with Microsoft's Steve Ballmer and do a deal--and she's an experienced operating exec, aka bona fide.

Some bits that caused me particular glee (and appreciation):
"Yahoo: "There is no denying that Yahoo! has faced enormous challenges over the last year, but I believe there is now an extraordinary opportunity to create value for our shareholders and new possibilities for our customers, partners and employees."

Translation: There is now an extraordinary opportunity to create value for our shareholders because I bring no bad history to the negotiating table.

Yahoo: "We will seize that opportunity."

Translation: What would it take for you to drive it off the lot tonight?"

There's lots more here...all sharp and observant and funny.

"

My friend Lisa Williams raises a good point in the comments on my Carol Bartz post. She writes:  "Susan, do you think this is an example of the "glass cliff"?

Just read Kara Swisher's post that Sue Decker is resigning and joining the board. Sounds true, not a surprise, After being passed over for the top role, isn't moving out of operational line of fire the smartest thing for her?

The Yahoo! release  says nothing about other staff, and Yahoo! has had enough talent drain for Bartz to move carefully and assess the facts, but she would be shrewd to turn to Hilary Schneider as the incumbent to help with that need. Not only is Hilary the freshest exec who's stayed on, she's had her own previous experiences with turn-arounds and she knows the online ad space, gets local and is just generally kick ass capable.

On the other hand, it would not be surprising for Bartz to bring in strong managers from outside Big Purple--but I predict Hilary is going to get a good workout with Bartz and a chance to prove herself--she surely has the skills.

Congratulations to Carol Bartz for accepting the CEO role at Yahoo!

A female CEO who has a CS /engineering degree, has run a successful enterprise software company(and sat on the board of several others), has history with the VC community in the Valley, and started hammering on an IBM 1620 back in 1967 is nothing to sneer at, especially when the alternative was either nothing or some secret plan no one really knew (like, nothing?)

On one hand I want to say how thrilled I am that Yahoo! has chosen such a competent manager and long time CEO; on the other, even if she's not from the ad-driven side of the planet, I want to give her advice about what the company looks like from the edges of the inside, based both on my talking with people who are still there and what I hear from those who have left.
 
So, welcome, Carol, and here's some things to know:

• The rank and file is hangin' in there, but they are pretty damned fried. Yahoo! is a sweet deal for certain sorts of front end engineer and product developer types, but even the most stalwart (survived 3 layoffs) are starting to look around.
• Last time, the old guard won. Mostly, it's the old-timers--not the social media kids, the Microsofties, or the start-up animals--who are still there. And they protect their buddies, and their turf. So, remember, they've survived LOTS of re-orgs and, like moss, they're still growing there.
  
• Yahoo finds it easier to say no to new things, especially if they are a tad R&D or don't fit into a fiefdom.  Flickr photo stock, Brickhouse Privacy Detective--there are lots of good ideas that went unfunded and were let go of because some big gun didn't want to put his (or her) neck out.
• Yahoo also finds it easier to say no to old things, unless one of those big guns thinks it will advance their careers.  My knowledge of Yahoo! Personals is over a year old, but the lack of investment and support for what was always one of the most visited dating sites in the category, with a great rate of return, seemed inexplicable.
• Yahoo! has fads. After all, doesn't putting all the resources on the next big thing usually result in a great solution? While the exec team doesn't like to bet on known risk, a couple of cute MBAs with a big slide deck (especially if they are expensive consultants) have been great reasons to do re-orgs and out everyone on new projects that, ultimately, fail to launch (or maybe are still in development, 12 months later, who knows?)
• t's a great company.  For all the crap, and all the silliness, Yahoo! has some amazing people and good will it is hard to let go of. 
  

I would love to see you, Carol, revive Yahoo! and make it shine again, with all the promise and fervor I saw in 2006 when I got there.

I would also love to see you help the stock go back up, so all my friends who are left and came when I did don't have those shares underwater and shareholders have more value.

Carol you are coming into a media circus, and that, as well, is going to be challenging. Ignore the comparisons to Carly Fiorina that some fool will offer and just do your job--a fresh point of view from someone who describes herself as tough, but fair, will go a long way--especially coupled with operational excellence.

Wish you could have seen the big smile on my face when I read Mike Arrington's TC post that a group of Silicon Valley investors want to take over Yahoo! and make it work. To this day, I shake my head in wonder at how something so good could go so wrong--Yahoo! has so many qualities of a winner, but it lost, big-time--in so many ways.

Could new local management make it right, or at least set it on the right course? 
I think so.
(Of course, on the other hand, so many execs have passed through Y in the past 12 months that there's the Who are you talking about here thing? and that does matter.)

Mark Cuban sez: "Rather than determining a strategy of profitability and growth, from my outsiders viewpoint, large shareholders and directors of Yahoo have become the "HuggyBear Contingent". Just a group trying to dress up Yahoo in order to pimp it out to any bidder it can find.

Big Mistake.  Yahoo should be taking the exact opposite approach.

Yahoo has a very simple business. Generate traffic and monetize it. It generates traffic through services and content. It sells advertising around them both. Their strategy should be to acquire every and any company that makes their traffic, services, content or monetization stronger."

Mark's conclusion: "Yahoo should be on the warpath, vetting each and every media (yes media) and technology company it can sit down with looking for bargains."

Susan sez: This is a very good strategy and a good suggestion. Problem is Yahoo! needs executives--and engineering leadership--who can a) make decisions on what to acquire and b) actually use the acquisition. Unfortunately, Yahoo!, like many big companies, has a history of acquiring companies and then not taking good advantage of the audience, product or IP they bring. Once Yahoo! has some new leadership in place--and resigns itself that putting 800 engineers on one project may not always be the saving grace some people thought it was--this strategy is a perfectly valid way to go, especially if they are prepared to bring in additional people to manage to this approach.

So the latest round of big Yahoo! layoffs is done, and the people picking up the pieces at Big Purple can draw their wagons closer together and hunker down in the bunker and all that good stuff--at least until they take two weeks off over the holidays.

Before we all move on, however, it's worth noting the amazing transparency around this layoff--the flickr photos, the tweets, the friend feed posts.

I'm hoping some of the ex-Yahoos! document their next moves with equal transparency--Yahoo! let go some amazing people, including George Oates, the first flickr designer and the Brickhouse crew, including the wonderful Jeannie Yang, and a whole host of talented coders and engineers.

Last February, when Yahoo! did its last big layoff, Ryan Kuder live-twittered his layoff, followed my  twittering and blogging my dismissal.  Our public transparency made the news, much to our surprise--some people felt it was a first time that let go employees didn't slink off and instead shared openly.

Today, as the world watches, Yahoo! is doing another big layoff, almost 12 months later. Only nobody is surprised by the tweets and blog posts about what's going on. What's more typical this time around is the tweet from just let go Brit @BenWard, who wrote "Totally fucking laid off. You could say that I'm not very happy about it. You would be right to say that." and had at least 20 people twitter advice and job help within an hour.

Even more pointedly, it's almost a media sport, with what feels like at least hundreds of people tracking tweets and posting stories.

Even with the poor economy and all the other companies' cuts, the reaction to the Yahoo! layoffs shows that we've clearly tipped into another universe, one where America is (finally) embracing high-touch communication and transparency and where getting laid off is something that happens, even if it sucks.

"Thank you, Aarom, for coming in. I have some information regarding our organization that I want to tell you in person.This was a very difficult business decision supported by senior management.  I appreciate what you have done for Yahoo! What is important right now is to focus on what is next for you."

--Start of reputed Yahoo! layoff script obtained by Valleywag, to be used in today's mass layoffs at Big Purple.

Kara Swisher's sharing that this Wednesday is the date for the next round of Yahoo! layoffs. She's predicting 1,500 to 2,000 jobs vaporized, adding lots more out of work in the Bay area, NYC and Santa Monica.

While there's something morbid about companies that do lavish holiday parties and then sever staff, it's more distressing to read that Yahoo's plan is to  eliminate whole projects and move divisions between managers.

As some one who was laid off from Yahoo! 10 months ago, reading this new makes me want to scream, loudly, something along the lines of "Senior managers at Yahoo!, you who have options vested and big salary cushions, when are you going to quit playing hot potato passing groups back and forth, funding and then starving projects every three-six months, and create a coherent strategy that might make a difference?"

Another thing that worries me is that, even with all the executive departures of the past year--the  Microsofties who came, drove people out and left, the  VPs and SVPs who went on to other roles (at Microsoft, venture funds and wherever) enough of the top management remains to suggest that this layoff, like the last big one, is going to be executed by people who don't have a clue how to manage human capital.

Last go round, as whole departments and projects were cut, some of the most skilled staffers in areas like interactive design, product management and program management were let go.  In other words, you could be top talent on a project, but if that project was cut, honey, you were toast.

Why would this go-round be any different?
 
Since Yahoo! is cutting by the numbers, we have to assume they're going to let some of the strongest people go again, perhaps to try to (quietly) later rehire, as also happened last time. So think about it--when those self-satisfied announcements go out, about the "deep cuts and the bright future that lies ahead", those left with out jobs in a deepening recession right before Christmas will have the comfort of knowing they weren't let go because they were the bottom 10%, they were let go because their managers fail to convince their bosses that those projects were ones that mattered. (And since the big bosses didn't know most of those people, great talent was let go, while deadwood remained ( and remained.)

Is it going to be like that this time (again)? Or it is going to be different? Wanna place some bets?

Layoffs are  always tough, and yes, sometimes you have to slash to the bone.

But I'm hoping that this time Yahoo! is (finally) able to apply some smarts in the human capital area. Maybe this time the huge upheavals and chaos this reduction in force will create actually leaves the best and brightest--not the most plodding and dutiful--on staff at Big Purple.

Either way, I feel for everyone losing their jobs.

So Qi Lu has just been confirmed as the new head of online services for Microsoft. Qi Lui is a brilliant guy and they must be thrilled to have him, but if I was one of the workers riding the wifi bus to Yahoo!, or an exec wondering if about the upcoming round of staff cuts, I'd be feeling pretty bitter right now.

I mean, not only has Yahoo! lost incredible stock value in the past 18 months, it's lost amazing talent.  After all, if you don't have a strategy, how do you know what you need to accomplish and who you (really) need to keep? And if you don't know what you're focusing on in the big picture, how can you keep the best performers signed up and interested?

My guess is that Microsoft is going to do a better job keeping Qi Lu than Yahoo! has done with many of the non-sales Microsofties they have hired, many of whom came, created reorgs, and then left. Of course, given the number of people the two companies have been trading back and forth over the past 18 months, there's no need at all to buy anything, is there?

So what is Yahoo! going to do after Microsoft (YAM)? I mean, besides endure fidicuary lawsuits and soldier on as before.

Well, Read Write Web says they should focus on the great services consumers love like flickr, which they call the new heart. Marshall K writes "...  Flickr is the new heart of Yahoo! and many early adopters (like our readers) are probably more likely to use Yahoo! services like Del.icio.us, Upcoming or even the new FireEagle than they are to be big Yahoo! Sports or Finance fans."

It's hard not to read this and choke, because my impression is that the senior executives at Yahoo think that the future--and the places investment should be focused--are --

a) APEX, the engineering intensive interactive advertising platform
b) Yahoo OS--Big purple's take on web services, platforms, and Web 3.0
c) Front doors and content personalization--ie How to make Yahoo's front page and the front pages of top content destinations like finance and sports more profitable and compelling (okay, "sticky)

If you asked folks at the company whether resources were flowing to the RWW list, or to the list above, you might get some interesting insights into where Y! is putting its bets.

In other words, management knows its ideas--and the great talent the company has-- are going to pull the rabbit out of the hat, and darn it, one day the rest of us will see that.

Or, Jerry and Sue have some secret, magical powers we just haven't seen yet (besides a golden parachute, I mean).

Susan sez: Maybe another way to say this is that there's both an audience and a generation gap...cause I don't think the RWW properties are what Y! sees topping their success list, but hey, I don't work there, I'm jest sayin.'

"In fact, if I were Microsoft, I'd be using a good part of that $40-odd billion to hire a SWAT team to help Windows Vista. I'm not talking about hiring more developers; I'm talking about finding folks who could creatively find a way to market downgrades to XP as a selling point. Microsoft should be far more worried about its Vista image problem than about outsmarting Yahoo, at this point."
--Mary Joe Foley, Microsoft Watch, writing about MSofties resistence to the proposed Yahoo-Microsoft merger

Susan sez: Nice to hear about it from the Seattle side; viewpoints at Y! seem so mixed, with lots of fear among staff about all the options (and  their sense Y! is getting itself together in terms of project focus, regardless)

Valleywag quotes a memo from AOL head Randy Falco talking about how AOL's plans for success are all about making the old into the new.

Falco: "The market is recognizing the value of what we've built together over the past year and a half, as we've shifted from a subscription model to an advertising-supported business. It's a remarkable transition that is gaining momentum with each passing week.
(snip)
Our collective rebuild of AOL over the past year and a half has positioned the company to prosper in this dynamic market. We know that strong, profitable companies have more control over their own fate. We still have more work to do toward this end. "

Is Falco a Spinmeister--or saying exactly what Yang might about Big Purple? VW thinks the latter? How about you all?