Yahoo Needs To Pull An Apple Before It Becomes A Netscape

from the can-jerry-yang-channel-his-inner-steve-jobs? dept

By now, of course, you've seen the story of the weekend: Microsoft walking away from its offer to Yahoo, after first raising its bid (though not high enough for Yahoo). Microsoft chose not to go hostile recognizing that would make a bad situation even worse -- in part because Yahoo made it clear that it would swallow its own type of a poison pill by handing over its search to Google. At this point, you can expect a bunch of lawsuits to follow, and Yahoo's stock to fall off a cliff. It's not unreasonable to think Jerry Yang's job may be on the line.

So what now? To be honest, this is a case where I think that the interests of Yahoo's shareholders and the interest of the company diverged. Jerry Yang and Yahoo probably recognized that the integration would be a disaster, in part due to the cultural differences between the two companies. I honestly think Yahoo has a better chance of doing something interesting separate from Microsoft. However, by "better chance" that doesn't necessarily mean a "good chance."

At this point, Yahoo has a rather short time frame to turn the company around. Yes, it's profitable and yes, it's still huge -- but its big shareholders are going to come out of this pissed off and impatient. So Yahoo really needs to "pull an Apple." Apple in the late 90's was basically left for dead. Michael Dell famously declared that if he were in charge, he would shut the company down and give shareholders their money. But Steve Jobs came back and reinvented Apple into a very different company, first with the iMac, then the iPod and more recently the iPhone. He stopped the company from being "yet another computer company" and forged a totally different path.

If Yahoo wants to survive (and not end up getting taken over for a much lower price in another year or two), it needs to stop trying to be Google. In fact, it needs to stop thinking so much about Google, and it has to come up with that "different" path, the same way Apple did. This isn't easy, and in Apple's case it took the singular focus and brilliant mind of Steve Jobs (who also surrounded himself with some other brilliant folks). Jerry Yang needs to channel his inner Steve Jobs and come up with a way to totally reinvent the company -- and fast. The odds of him being able to do so seem slim, but if he can't, he should have just taken the last Microsoft offer.

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