Who to Run Yahoo? Strong Candidates Abound, But First -- a Vision, Please

Thu Sep 8, 2011 7:18pm EDT

With CEO Carol Bartz unceremoniously dumped this week (see her pungent reaction here), the Yahoo board has hired a search firm to seek her replacement, TheWrap has learned.

But before hiring a search firm, perhaps the Yahoo board of directors ought to be answering the question, “What is Yahoo, and what does it want to be?”

Because who runs the company needs to be closely tied to that question. For two years Bartz struggled with it, though it is crushingly obvious to most observers that since dumping its search business Yahoo is no longer a technology company.

The problem may be that it isn’t truly a content company either.

“She never had a vision. And she didn’t learn the business,” said one high-placed executive at a competing company, speaking on condition of anonymity. “The first you can excuse, the second you can’t.”

Bartz’s errors – from stories about throwing out the CFO upon arrival, or failing to consult any of the talented executives who were there when she arrived – are increasingly well-documented.

And according to a regulatory filing, Yahoo's Chairman Roy Bostock may lose his job too. Bloomberg reported that Third Point LLC, a New York investment firm that has accumulated a 5.2 percent stake in Yahoo, urged Bostock and his fellow directors to resign on Thursday, citing their responsibility for the company’s poor performance. 

“Yahoo’s current board of directors has made a number of decisions that have directly harmed the company and resulted in a stock price far below the company’s intrinsic value,” Third Point said in a regulatory filing.

But Bartz is now history and the board - whoever leads it - has a responsibility to articulate a vision around which a new CEO can lead.

“There are two choices. They can fight it out at the tech platform level. Or be a media company.  Believe it or not they’re not sure which they are,” said one observer with knowledge of the board’s thinking.

Said another person in a knowledgeable position (none would go on the record for this story): “There’s only two ways to make money here: search, or display ads.” And they gave up search to MSN, whose revenue is declining. Which leaves display ads.

So, ok, let's make it easy: Yahoo is a digital media company.

Or simpler still: Yahoo is an ad sales company.  Hence the need for content.

And that may very possibly be why Ross Levinsohn, currently in charge of all of Yahoo's business in the Americas, may be first in line to take the CEO job. He too needs to lead a crack sales force around a vision.

Levinsohn, who came via NewsCorp and an investment company, has been pursuing a content strategy at Yahoo since arriving earlier this year. He’s hired editorial talent (including TheWrap’s former media columnist Dylan Stableford), plunged deep into original web video production and talks to all and sundry about Yahoo having “a voice” and a “point of view.”

For the moment it still does not have either. Tim Armstrong at AOL can tell Levinsohn a lot about how hard it is to establish a voice once you’re set in the public’s mind as a place to get your email.

But unlike AOL, Yahoo still has tons of traffic, giving it a much better chance at a reimagined mission than at the struggling ex-dial-up portal.  

Levinsohn is not the only strong potential candidate.

Any shortlist would have to include Jon Miller, the chief digital officer at NewsCorp and former leader at AOL. He would be well versed in sitting astride a technology company that is dependent on content; or a content company with a technology underpinning. And with the sale of MySpace, he has less to do.

Speaking of which, it should also include Mike Jones, the outgoing CEO of MySpace (though my sources tell me Jones is well on his way to launching a new venture about which he will tell me nothing).

And it could easily include Jason Kilar, the CEO of Hulu, especially since Yahoo is a leading bidder to buy the streaming service.

Personally I’d vote for Jeff Weiner too, though why the CEO of LinkedIn would want to leave his golden job for Yahoo I have no idea. But he’d be good.

One senior executive with experience in the sector said Yahoo must innovate with new products.

There’s nothing wrong with a ballsy CEO who likes to use the F-word for effect. (Heck, Ari Emanuel uses the word almost like “Good morning.”)

But for Yahoo – a tragedy would be to squander one of the few Internet content platforms by letting it flail further under a leader with no clear mission statement.

Related Articles:  Ousted CEO Carol Bartz: Yahoo 'F---ed Me Over' After CEO Carol Bartz's Ouster, What's Next for Yahoo?