Jerry Yang’s departure signals a New Day for Yahoo!, the passing of an era for Tech

My first reaction to the news that Jerry Yang is leaving Yahoo! was that this was the passing of an era. I first met Jerry in 1994 when he was still a PhD student at Stanford, before he and David Filo left to run Yahoo! full time. Through bubbles and two economic downturns, Jerry has always been omnipresent in Silicon Valley.

But all good things come to pass. With the arrival of Scott Thompson as the new CEO of Yahoo!, it makes sense that Scott be given a clean slate upon which to write the future of Yahoo!. This is very much the norm for incoming CEOs, where founders are asked to take a diminished role or expected to leave the company completely.

This is the case with Jerry all the more so, as he was (is?) a vehement supporter of Yahoo! remaining independent. Regardless of Jerry’s real or perceived position toward independence or selling off assets such as Alibaba or Yahoo! Japan, it’s still all baggage hanging on from a previous era. Scott and Yahoo! need the  freedom to set the vision and strategy for Yahoo!, unencumbered by the past. The last thing Scott needed was the ghost of Yahoo! Past — embodied in the very real, very smart, founder and former CEO of Yahoo! — sitting at the boardroom table.

So what does the future bring for Yahoo!? While many people have written off Yahoo! but I’m less inclined to do so for the following reasons:

  • Loyal users. It’s amazing to me that Yahoo! attracts 700 million unique and very loyal users each month. That’s somewhat less than Facebook’s 800 million users, but it’s huge by any standard. Through thick and thin, they have stuck with Yahoo!, despite having a plethora of other options available to them. But how there continues to be continued erosion so Yahoo! will have to invest in it’s “front doors” of Mail, MyYahoo!, and Home Page, as well as new offerings around it’s user engagement vision. As my colleague Rebecca Lieb commented in this article, “”Yahoo is a very vaguely defined company strategically,” Lieb said. “It has a million or zero identities. It’s everything and nothing.”
  • Access to implicit social and interest graphs. The emails and address books of those 700 million users create an implicit social graph, similar to the one that Google is trying to tap via Google+. Front page content reading leads to tremendous data about what those 700 million people are interested in. This is gold for future targeted advertising, but Yahoo! has done little to develop or market these capabilities.
  • Advertisers wanting to reach those users. Yahoo! will generate about $5 billion in revenue this year, most of it from advertisers with whom it has a direct relationship. But those revenues are declining as other options are growing.
  • Technology chops. Yahoo! has had the ability to be ahead of the market, from purchasing Flickr and Delicious to starting an early form of a social network in Yahoo! 360 back in 2005. I continue to admire and use Yahoo! Pipes and it’s developer APIs remain excellent. What it’s lacked is a clear vision of how those investments tie into a coherent vision and strategy for Yahoo’s relationships with users and advertisers.
One scenario I can see happening: Yahoo! sells off Alibaba and Yahoo! Japan to generate cash to purchase interesting start-ups that will enable it to develop state-of-the-art social and personalized offerings for its 700 million loyal users and advertisers. As a neutral and trusted player, Yahoo! can tap into the social and interest graph data from Facebook, Yahoo, LinkedIn, Google+, or any other newcomer, making sense of the ever-changing landscape to its users and advertisers.

So I wish Jerry Yang the best, and I wish Yahoo! the best — not only for nostalgic reasons but also because I think there’s still yet another chapter to be written for both of them. Jerry is still youthful and hopefully restless still to make an impact — and it will be a lucky start-up who can tap into his now ample free time.
  • http://blog.varadh.com/ Varadh

    Good post. I think Yahoo should start with some rewards to Loyal users. People are still nostalgic about Yahoo and have stayed through thick and thin because it could have been their first id or something-to-relate to it as a starting point of their journey. They still keep it for such reasons. It would do well for Yahoo to start right from there to the future.

  • Jbchua_99

    Agree with you Charlene.. looking forward to Jerry’s next venture..his creativity and entrepreneurship spirit will be his driving force.. The best is yet to come! 

  • http://www.conceptbakery.com Klaus Holzapfel

    I like your refreshing perspective. Everyone is cracking jokes about Yahoo and Mr. Wang and there are always at least 2 sides to a story. Fighting for independence in a world where hungry shareholders only have one thing in mind is not an easy task. I don’t think people will accuse him for selling out. 

    And yes, Yahoo won’t go away unless someone kills it. This is no MySpace.

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  • Ryan Shea

    I agree with Klaus, this is no MySpace. As big as other companies may get, and as many other options are available to users, people usually stick with what they are comfortable with. Yahoo is something that I have always used. For my email, for my search engine, and for many other things. I think this is a strong company that will stay strong, even if it does have 100 million less users per month than Facebook!

  • http://www.paulisystems.net Birgit Pauli-Haack

    Thank you Charlene! Your expressed very well the feeling of nostalgic melancholy around Jerry Yang for early Internet folks. Jerry Wang is one of the Internet pioneers. I remember Yahoo’s Directory of sites, edited by humans.  I have been a huge fan and user of Flickr – there is nothing more fabulous around the net to share photos that has a whole ecosystem developed around a deep API and integration into the rest of the net. I admire the Yahoo techies who created Pipes, Flickr and other APIs. Yahoo! Blueprint stopped way too soon!

    Yahoo technology team could focus on providing the glue that will hold the net together despite the fact that our lives and information becomes fragmented.  Looking forward to the next generation of Internet pioneers at Yahoo and Jerry Yang’s next ventures. 

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