Business Insight Zone

Somehow the yodel isn’t quite so convincing anymore. Yahoo! Inc. is in the midst of a 100-day strategic review that aims to get the online pioneer back on track as one of the bellwethers of the Internet sector. The review is being led by the company’s new CEO, Yahoo! co-founder Jerry Yang, which is good news because Yang enjoys as much clout within Yahoo! as anyone could. The bad news is that he must succeed — and probably very soon — if he wants to avoid the investor unrest that led former CEO Terry Semel to depart. Yang was understated but upbeat when he delivered a somber earnings report recently; when he reports Yahoo!’s results for the quarter now underway, he will want to have better news in hand to satisfy an investor community unsure about his company’s long-term prospects.

Murmurs from insiders suggest that Yang has already improved morale at Yahoo!, even while making some tough choices about what his company will do going forward. Answering that riddle is hardly a small task, because Yahoo! stands squarely in the path of the Internet’s Colossus, Google. It seems that each passing month makes Yahoo! less relevant in the online search business, which it once led but which Google now dominates. Media and Internet analysts are divided about how well Yahoo! might fare going forward, and even about what its core business should be. In one scenario, the company could play Ford to Google’s GM — the early leader that fades to a strong second place. But some smart folks have asked whether a more fundamental shift isn’t underway. In this scenario, Yahoo! might be offering the modern equivalent of a steam-powered horseless carriage — at the same time that Google has rolled out the Model T.

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* This article first appeared on our Company of the Day page on 20 August 2007.

Category: Company of the Day, Internet, Media