Daily Debrief: Yahoo's health checkup Video

Daily Debrief: Yahoo's health checkup Video Transcript

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>> I'm Kara Suboy, cnetnews.com, welcome to the Daily Debrief. Our guest today is Dan Farber, editor in chief of news.com. And Dan, we're gonna check in today, and kind of take a pulse of the Yahoo goings on. I know there's been a lot of key figures leaving the company recently. That can't be good for morale over there.

>> Well I think morale at Yahoo certainly is not the best that it's ever been. It's been a big challenge since February first when Microsoft came in with a hostile bid. And now we have Carl Icon with his hostility, trying to bring shareholders over to his side to do the deal with Microsoft. It's not even clear that Microsoft still wants to do the big deal. But recently, for example today, Jeremy Swadney [assumed spelling], who had been at Yahoo for eight and a half years resigned. He was working on a lot of the open source projects there. Jeff Weiner [assumed spelling], who is the executive vice president in charge of content and network services, as well as the front door and communications, he is rumored to be leaving the company as well. And even going back a few months, Bradley Horowitz, head of advanced development, left. So definitely some issues.

>> But these are not the only major departures of late. I mean there's been some turnover in the last couple of years.

>> There's been turnover. And if you talk to Sue Decker, who's the president of the company, she would say that the employee retention is about the standard for the industry. But if you look at the kind of people who are leaving, as well as the layoffs that they had in January of this year, where they laid off about a thousand people, which was somewhere around 10% of the workforce, you know, it's been a very troubling time, and a time of uncertainty. And I think you can really go back to January of 2007, about one year ago, when Jerry Yang, who was a founder of the company, and Sue Decker, who was the CFO, took over the two top spots of the company from Terry Semole [assumed spelling], who was pretty much forced out because of poor performance, and a lack of credibility on Wall Street.

>> So a year and a half later we're still seeing departures, we're still seeing a lot of unrest. I mean people have got to be exhausted with everything that's going on with this company internally.

>> There is fatigue in Sunnyvale at the Yahoo headquarters, and it's very hard to see at this point how they can overcome it, except by keeping good people and building their products. Because a lot of what's happening right now is you become distracted, and it becomes very hard to get your developers and everybody focused on the big prize. And they have a couple of really major initiatives that have been slow to crank out. One of them is a new ad system, which is combining both the text ads and the display ads, and display ads is where Yahoo really has a good lead. So that's a critical piece of what they have to get out. And then secondarily, what they call Yahoo Open Strategy, which is their attempt to what they say is rewire Yahoo so that it has a social dimension.

>> Right. Which is partly why they want to remain independent, not get sucked into some other social dimension I imagine.

>> Right. And I think that as a founder, Jerry Yang bleeds purple he says, and he wants to remain independent, he wants the company to survive. Or they would, but here's where it gets strained. They want to be independent, and yet they're asking for thirty seven dollars per share from Microsoft. So is it just about the money? Is there a strategy behind it? And that's always been the problem that I've had, is what would be the strategy of a combination between Microsoft and Yahoo. We hear from Microsoft what their strategy is, they really want to get deeper into search to compete with Google, and there's a few other synergies in engineering. But from Yahoo we really don't hear much about why they think they could make a good deal out it, other than pay us the money.

>> Right. They've been on the defensive for six months now, so, with nothing coming out.

>> So I think as we look out in the next few weeks, the shareholder meeting is coming up in August. There are a number of suits, and Yahoo really is under a lot of stress to produce results, not just quarterly results, but results in terms of making progress with these new products that they have to get out to be more competitive.

>> Thank you Dan. Yahoo News clearly comes out every day, if not three times, four times a day. So check back with news.com for more. [ background music ] I'm Kara Suboy with Dan Farber, cnetnews.com. This has been the Daily Debrief, we'll see you next time. ^M00:04:12 [ music ]