Pink Slips at Yahoo - Yang Cannot be Far Behind !!

Implications: Deteriorating market share, no longer the darling of Wall Street, lots of competition, a recession to deal with, declining revenues, and a not so spectacular outlook for the upcoming year. After you layoff employees, the CEO is usually not far behind.

Analysis: When you nip and tuck a company that is perceived to be a grower it is fair to ask whether or not things are far worse than the company has made them out to be.  Revenues are down and there are no clear plans for growth.  Laying off people is not a plan for growth but a plan to stem the bleeding of cash.

The reality is that Yahoo is nowhere near as bold and innovative as Google is.  Yahoo was quite the mover and shaker in its day.  However, Yahoo has done little to separate itself from a small pack of search engines.  So overwhelmed by Google, that Yahoo has become a distant number 2 or also ran.

However, like many restructuring folks would say, “after you hit bottom, the only direction to go is UP.”

Yang can step aside, not necessarily down and out.  I am a believer in having legacy management in place when the company is a personality driven company.  The question now is whether or not Yang can deal with another person, once again, running his company.

My advice to Yang is:  don’t let your board force you out.  Step aside gracefully and be Chairman Emeritus.