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Yahoo's Lack of Leadership

It's only been a year since Jerry Yang took over at Yahoo, but it sure seems longer than that. Prior to Jerry it was Terry Semmel who led the purple and yellow. Perhaps Jerry could blame Terry on why the company is in the position its in today, but that wouldn't really be fair.

Terry Semmel failed as Yahoo's leader because he missed the market. He undervalued search, didn't understand the dynamics of user generated content and tried to run Yahoo as an old-school content/ display ad shop, albeit with a different UI. But in my mind these are actually understandable, if not forgiveable, mistakes.

When Terry Semmel started, the economics of search hadn't played out yet, UGC was still in its infancy and most of the industry was trying to apply the old media rules to the new medium. And besides, it's not like anyone though Terry was a new media visionary - he was a Hollywood guy. Hollywood does two things: creates content and monetizes it. What a shock that when he came to Yahoo that's what he tried to do. He was hired to replicate the hollywood model at Yahoo and that's what he did. Obviously we now know that it was the wrong strategy, but that's hindsight talking.

But even under his leadership, Yahoo stayed atop as the most trafficked site on the net, and one that made billions of dollars annually. Terry's biggest problem is that another company came in an took a large part (note: not all) of the most lucrative business from underneath him. In other words, Terry failed to be Google. But then again, so did everybody else. That's a strategic error, not a leadership failure.

When Terry Semmel left the asset was still relatively strong, just some opportnity costs effecting its value. Jerry Yang however is a different story. There's an old saying that bad leaders don't make bad decisions, they make no decisions at all. When Jerry Yang took the reigns over at Yahoo his first, decisive act was to...wait for it....spend 100 days figuring stuff out. Ugh. And it only got worse after that.

The job of a leader is to lead. Its to make decisions, tough ones, in a timely manner and to generally be that authoritative force that inspires those being led. They might not make the right choice every time - but that often times doesn't really matter. Most bad decisions can be fixed. It's the paralysis that comes with not making decisions that can't be overcome. That type of paralysis leads to lost confidence of the troops/ employees - and once that happens, you're done. Every decision is questioned - openly and publicly - defections occur, factions are formed, etc. It's the paved road to failure.

And that's where Jerry finds himself now. It's not his actions that have been the problem, its his inaction. Think about it, his first 100 days, after all that thinking/ evaluating, led to...what? Ok, you don't like the Microsoft deal, fine - instead your going to do....what? It's not been poor stratigic decision that led the asset of Yahoo to be where it is today, it the been lack of guidance and leadership. There's no vision/ plan/ leadership to inspire the troops. Unfortunately, there's only one way to fix that.

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This page contains a single entry from the blog posted on June 24, 2008 3:12 PM.

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