Jerry Yang’s Big Decision

I don’t envy the decision he has to make. Jerry Yang, I mean.

I’ve been closely following the news of Microsoft’s (MSFT) bid for Yahoo! (YHOO), since I’m an ex-Yahoo! and still have a lot of friends & colleagues there. While endlessly discussing and analyzing this news, I began to wonder what must be going through Jerry’s mind.

Let’s take a step into Jerry’s shoes. Back in college, all the geeks were in a tizzy over Mosaic and this thing called the World Wide Web. So, along with your buddy David Filo, you create a master index of sorts called “Jerry’s Guide to the World Wide Web”. Suddenly, the Web opens its academic doors to allow in commerce and corporations and capitalism, oh my. You decide to incorporate—and the next thing you know, you’re surfing on a peak of $475/share and are one of the world’s richest people. Your momma sure proud of you now!

Then the wave crashes. Your surfboard topples over. You struggle to stay afloat while younger surfers enter the fray, doing much better than you are. So you bring in an experienced lifeguard. Never mind that he’s never surfed before; you figure that since he knows how to swim, he’ll be able get you back onto the surfboard.

Okay, enough with the analogies. Back into Jerry’s shoes. Present day. The company you built and raised from scratch is hurting a bit. You’re still making tons of cash, but the media and the stock market are hammering you hard. And worse—some of your top talent is leaving because of that.

Then a major competitor comes knocking at your door again (they’ve done this before). Except this time, they make their bid public, hoping to win the support of your shareholders. Reports from the media (like MarketWatch and Forbes) warn that such an acquisition would not be easy on either company. Your employees, advertisers, and partners are all concerned and shouting, “What’s going to happen to me?”

So you grab your favorite bottle of scotch, sit by the shore, and wonder:

• “If I sell my company to Microsoft, will they lay off half of my friends & colleagues and put my company through painful months of transitions, while combining our collective talents, expertise, and financial resources to put us back on top of the market again?”
• “Or, if I don’t sell my company, will my shareholders revolt as my stock price drops amidst my already planned lay offs and talent drain, while remaining tenacious and using our remaining resources & leadership to put us back on top of the market again?”

Not an enviable position to be in. There are pros and cons to every side of this story. Every constituent has his/her own concerns. Whatever decision he makes, he’s going to hurt somebody.

Personally, I think Jerry wants to say “No” to Microsoft. I think he still has hope for Yahoo!. He’s seen it through the dot-bomb and I think he’s willing to see it through this economic downturn as well. He’s a true Yahoo!, with purple blood and a bang (!) in his heart.

But he’s a smart enough guy to know he’s got to think this through and do what’s best for his company, his shareholders, and his customers. I think he’ll ultimately be realistic about his decision, whatever it will be.

I don’t envy him. And Jerry, I hope you’re drinking some good scotch there.

Author: Mike Lee

An idealistic realist, humanistic technologist & constant student. View all posts by Mike Lee