Yahoo layoffs: the aftermath

Yahoo layoffs: the aftermath

Summary: Yahoo laid off 2,000 people yesterday. The move buys new CEO Scott Thompson time, but it doesn't buy him answers.

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Yesterday morning, Yahoo said it would lay off 15 percent of its workforce.

Newly installed chief executive Scott Thompson clearly wants to send a message to folks inside and outside company walls: I'm not here just to keep the corner office chair warm.

Reactions have been decidedly mixed.

The AP's Michael Liedke on the basics:

The specifics of Thompson's vision are still unclear. In comments to analysts and reporters, he has talked generally about doing a better job of analyzing the data that Yahoo collects about its 700 million monthly visitors. That would help the company sell ads and develop mobile services to connect with the growing number of people surfing the Web on smartphones and tablet computers.

But the most important numbers hurt: six layoffs and three CEOs in four years -- not the mark of a healthy company. Sure, quarterly earnings are great, but the short-term wins under Bartz and Yang have come at the expense of long-term survival and relevance.

That long view isn't yet in focus, Business Insider's Nicholas Carlson writes:

Our source says the plan is not nearly so fully formed as that memo made it sound.

"It's not as flushed out as everybody's making out. Scott is totally shooting from the hip. He has said it in a couple meetings, 'I'm going with my gut."

We'll find out more on April 17, after the company releases its first quarter results.

But it's not all mystery. Yahoo -- amazingly -- still has the users; it just needs to find a way to monetize them.

The Los Angeles Times' Jessica Guynn imagines an existence somewhere between publisher and platform:

Thompson is wagering that Yahoo can sell more ads if it drills down into that rich trove of personal information. The Sunnyvale, Calif., company still owns some of the most popular news, sports and finance websites.

The good news: if you have a captive audience, at least you can then figure out how to monetize them. (See: Facebook, Twitter, etc.) It's difficult to monetize an empty room. (Right, Myspace?)

The Washington Post's Brian Womack questioned whether the layoffs will "trigger a turnaround," but I think he (or his editor) misses the point -- it's not the layoffs that matter in the long run, it's the direction in which the next steps are made.

Comparing Yahoo's mission statement over the years, from an "Internet navigational service" to a middleman between advertisers and consumers, Mashable's Lance Ulanoff gets the disconnect:

Yahoo today is really, primarily, a portal to content (its own and third-parties), information and tools. Yahoo won’t describe itself that way because “portals” is very late 1990’s.

...adding, "Yahoo now thinks it’s a platform, though no one else does. No one is building apps for Yahoo. Yahoo builds for itself and people use its services." That's not entirely a bad thing, if that's the direction it thinks it can go -- and does so.

In three months' time, has Thompson already figured out Yahoo's new direction? Even a visionary needs time to think, and Yahoo's largesse is large enough to suggest that he barely had a chance to review the numbers.

Thompson's real challenge is to reconcile where Yahoo is with where it wants to go. And he needs to decide the latter first. Layoffs can be a means to that end, but this round is only buying Thompson time -- it won't offer any answers.

Topics: CXO, IT Employment, Social Enterprise

Andrew Nusca

About Andrew Nusca

Andrew Nusca is a former writer-editor for ZDNet and contributor to CNET. During his tenure, he was the editor of SmartPlanet, ZDNet's sister site about innovation.

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  • Yahoo - Crap Product, Crap Managment and Crap Staff....

    Yahoo = Crap.
    Wroger Wroger