Yahoo's Declaration of Dependence

As Mike puts it today on TechCrunch, a lot of peanut butter bein' spread around Yahoo again with Sue Decker's email sent out company-wide this morning. I had dinner with Sue a couple years ago, and ultimately completed a few strategic deals between Yahoo and Groxis, the company I co-founded and ran for the past five or so years. What I can tell you is this. Sue is a smart, driven executive. No doubt she'll get the operational job done better than anyone at Yahoo today. However, I question a few of the organizational moves she's outlined in this 2007 manifesto. Perhaps the most glaring and most critical to Yahoo is where their core search group gets parked inside the organization. According to the email, core search is now part of "Marketing Products" which I find rather curious.

The three most important rules for any startup company in the Valley are: focus, focus, focus.

The good news is that Tim Cadogan has been tapped and promoted to head up the core search organization. Tim is a very smart, capable, and cool guy, with whom I structured our 'landmark' deal with Yahoo. Landmark in the sense that we were one of the first search companies to get Yahoo and Google to play nice in the same small sandbox that was my startup. Anyway, Tim is unquestionably the right guy for the job, and needs his group to be elevated to have a greater effect on how the core search is being leveraged not as a marketing product, but as a supply-side horizontal revenue generator across the company. The new structure could put the company at risk by layering it vertically into the organization. If you look at Google, core search is far bigger, and far more horizontally aligned across the company. And for good reason. It (along with AdWords) is their bread and butter. It used to be Yahoo's bread and butter too.

I can't help but think that Yahoo's acquisition spree has precipitated this latest move. With so many seemingly random acquisitions to keep pace with competition, the company has had to react vs. act. This leads to a contrived strategy based on the new assets they have to deal with and leverage effectively to please Wall Street (read: justify the acquisitions). Whereas you'll notice Google to be slightly more proactive, with a seemingly tight-lipped strategically planned growth strategy. We'll be watching closing to see how this new plan plays out for Yahoo. Don't lose sight of the importance of core search, Sue, Yahoo depends on it. And remember, it's never too late to focus, focus, focus.