Business Insight Zone

Yahoo is broken, and Jerry Yang cannot fix it.

Consider this morning’s unsettling Yahoo news:

Yahoo to dump 1,500 workers as slump deepens

Now consider this: most corporate turnarounds happen faster than you’d think — often in 18 to 24 months. Sure, sometimes it takes longer than that for the details to shake out, for new revenue streams to get up to speed, and so on. But the fundamental work? In many cases, if not most cases, it’s going to happen in that first year-and-a-half under new management — IF it’s going to happen at all.

Yahoo co-founder Jerry Yang took over as CEO in June 2007. That’s 16 months ago. Lately, the company has suffered from a general slump in online advertising connected to the big slump in the overall economy. Beyond that, the company’s attention was diverted for months by Microsoft’s acquisition attempt (an offer, by the way, that Yahoo’s board should have jumped to accept).

But set aside these circumstances and look to the underlying reality of a Yahoo that is not changing fast enough to keep up with its environments. Good companies — companies that really turn it around — get better regardless. Yahoo isn’t getting better. To paraphrase a line from Pulp Fiction: “You have ability, but if you were going to do something, you would have done it before now.”

If Jerry Yang were going to reinvent Yahoo, most likely he would have done it before now. (He’s had plenty of free offers of good advice.) Now the question is: will he see that he can’t do it and hand the reins over to someone who can?

What would you do if you were in his shoes?

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Related posts:

• Microsoft decides to play hardball with Yahoo.
• The Illogic of a Microsoft-Yahoo deal.
• Yahoo suffers the death of a thousand meetings?
• Company of the Day: Yahoo [9/11/2007].
• What should Yahoo! do?

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Category: Company of the Day, Internet