All the press release from yahoo seems to say is that they are going to be looking for a new CEO and when the new person is found, Jerry will transition the role. Are you pulling a Steve Jobs and staying on as “Interim CEO” for couple of years? I hope so.

Jerry - Now that you announced that you will step down once a competent CEO is found, let’s hope that your detractors shut up and let you focus on running the business. I hope you can continue your good work and kick butt with YOS ( which i think needs a lot more resources and lot more focus ). Keep the company focused on product innovation and process automation.
Also, I request you to fire those losers at tech ticker. It doesn’t help to have your employees publicly rail about every one of your little steps in the name of reporting.

I, for one, is looking forward to the change. Barack Obama’s Presidency is going to be great for US image across the world and most importantly, I am hoping his presidency will be good to citizens of USA.

Entrepreneurs are not liking the negative coverage and are acting like cry babies. They make up some weird excuses about how coming up with new business models is hard and how “efforts should be lauded”. Tech crunch is on the defensive, explaining how reporting the failures is also part of their job.
I have two words for these whining entrepreneurs - GROW UP.

Startups enjoyed their day in the sun, getting good coverage for building simple features, getting good runway to experiment with new business models on someone else’s cash. The reward for coming up with a new business model that scales/works is financial. You turn into a millionaire. If that business model doesn’t work, investors loose their money. Your resume looks great no matter what. Now, if you are not liking a little bit of the negative attention you are getting - deal with it. This is real life and real business. Techcrunch and other bloggers are not here to “laud” your efforts if you not adapting to changing markets and falling on your face. They are not here to sugarcoat company’s events even if you are gallantly trying to adjust to changing markets. What’s wrong with calling a spade a spade? I know it doesn’t put an entrepreneur’s company is the best light. So what? Why should they? Hire a PR firm if you want that.

Techcrunch is not obligated to tell anyone if they themselves have hard times financially. But i expect they will be open. If they are not, There are other blogs/bloggers who can take that responsibility.

As for “throwing the deadpool in deadpool” - my suggestion is that if you don’t like what’s on techcrunch and other blogs - unsubscribe. If people don’t want to hear about this news and a lot of people unsubscribe then techcrunch will follow the market. I - for one - definitely want to know about all the news regarding startups, even if it is negative. In fact, this real, no spin version of events is really what everyone wants when they look at a startup’s success or failure. If you ask any entrepreneur, all of their startups would be some sort of success.

Here is where i think he misses the point. The assumption underlying with Mr. Blodget’s analysis is that even after cutting people yahoo! and its processes can retain the same revenues, and support the operations for those revenues. Not only that, with reduced r&d they will be able to continue to innovate, keep the product line competitive and ensure future revenue growth.


First lets tackle sales & marketing. Google’s clear advantage is the AdWords interface and automated solutions. Also, bulk of their revenue comes from search advertising selling a single product. All their other products make way less revenue when compared to the search business. I contend that the big reasons why their sales & marketing costs are lower is because

• CPC text link advertising needs much lesser touch & sales cycle than banner + display advertising. Yahoo has a large display advertising business when compared to Google.
• Adwords along with their apis, are able to support small and mid sized buyer at a lower cost. Despite the efforts, Yahoo! still is behind in self serve products and does not have market share here
• Selling one product to various customers needs fewer sales/marketing people than selling 50 different products and competing in 50 markets. Yahoo! derives it revenues from a lot of different, diverse verticals apart from search - Automotive, Finance, Games, Jobs, Movies, Shopping, Sports, Travel. Each of these verticals do not make billions of dollars, but they make sizable revenue. In fact, in each of these vertical businesses, Yahoo! is understaffed, competing against much larger competitors with much fewer resources. Each of these verticals need their own marketing budgets and staff as well.
• Sophisticated & integrated ad programs take more human ad operations and support folks. Yahoo! runs quite a few integrated ad programs while google has close to none.

Now, What will happen if sales/marketing staff are simply let go? Unless by some miraculous surgical means, they are able to product same revenue with approximately 25% less staff. It is realistic to assume that yahoo! has not been working any process, or system for this amount of productivity gain. It also realistic to assume that the remaining 75% of the staff won’t be super motivated to raise their productivity. So more than likely future revenues will suffer. This means even for the future quarter, the margin will suffer. To keep up margins, Yahoo! will have to let go more sales people. All this is just a vicious spiral downwards.

Now the cuts in R&D staff have much worse impact on the longer term health of Yahoo!. The main reason why advertisers come to Yahoo is because Yahoo! has a large audience. If Yahoo! does not invest in keeping products fresh and engaging, Yahoo is going to loose its core asset - users - and turn into AOL. In my opinion, the main reason why yahoo! came to today’s situation - after being dominant portal through 2002 - is the lack of investment into new products. Investment into search did not start till late. Investment into social networks and open platforms hasn’t started till recently. If yahoo! makes this mistake again, I believe it would be the end of Y!.

So, if the staff not be cut, what should be the way for yahoo!? If Yahoo is right sized or undersized - why isn’t Yahoo! winning?
First of all - Yahoo is a profitable company. Their net margins are 7% not 0 or negative. It is not as profitable as Google but still profitable. I have clear cut ideas about how Yahoo can emerge as a stronger company through this turmoil. Those should justifiably be in a separate set of posts.
Staff cuts may be needed, but they should be based on what yahoo! sales as revenues it is making because of current economic turmoil rather than trying to match competitor’s margins.

However, going through and laying off Yahoo! staff to match Google’s margins would be a blunder.

All the people I know @ yahoo! are super talented and I hope yahoo does not make the mistake of letting them go. Nonetheless, these are tough times, and my prayers with everyone of them and yahoo!.
When i recently talked to few friends at yahoo!, the mood was optimistic, and positive. I hope this continues and yahoo emerges stronger than before.

I started looking at code.google.com and found that they have tons of apis for various products. This is quite impressive. I like the Ajax Search API, Android, and Open Social APIs as well. One lesser known api that i wanted to use is Safe Browsing API. I always wanted to build a safe browsing plugin for firefox and IE. May be someday.

Now the idea is works very well with in the story. But, Is this real? I am sure a lot of parapsychology and/or metaphysics debates cover the validity or invalidity of these ideas in real world. I don’t have any expertise or knowledge in those topics. However, the idea about connecting with the universe and harmony with elements of nature resonates with me. I can look back in my life where i feel that some seemingly improbable things happened for no apparent logical reasons. I can only point to my faith, harmony i felt with nature and a energy i feel about myself and my life as the potential causes.

Personally, at one level all this seems hokey. All the indications i can see in my life as connecting with nature and achieving improbable results in my life can simply be attributed to chance. Other indications where i felt that i could see what’s coming is not really premonition, but simply an educated guess at what’s to come and some glitch in my brain synapses.

In any case, the idea of being in harmony with elements or people or situations around me, the idea of approaching life with a great positive energy and happiness and strength seems very appealing. It is hard for me not to have faith. Sure i can’t find a scientific explanation. But faith in this idea does resonate at a deep level with me.

Having said all this, I came across a new book - “The Secret“. The Alchemist presented these ideas as a story/fable and leaves it at that. Just a part of a story. The Secret however is more like the “Millionaire toolkit” that gets marketed on infomercials late at night. “I have this great system that can make you millions if not billions of dollars and all you have to do is spend $19.95 to get it. Of course, i am selling this system to make $19.95 instead of making the billions using the said system because the system doesn’t work. ”

The Secret, reveals the secret of people who seemingly have what they want, by just using your thoughts. It is a clear, simple, succinct, manual to think your way to great success. You can use your thought to get women, houses, money, jobs, promotions etc.
Of course, they recommend that you start with parking spaces

Despite the sleazy, money making toolkit like feel to this book, the core ideas presented here are very similar to that of paulo’s alchemist. There is a lot of wisdom presented in this book. Some simple ideas that i like are

• Like attracts like. The concept that one negative thought leads to other and one positive thought leads to other. Choose to think positive when presented with unfavorable circumstances.
• Meditate. Clear your mind. We are constantly bombarded with inputs to our brain all the time - work, email, tv, radio etc. Good resting focus time for brain helps.
• Gratitude. Appreciate what you have in life. Appreciate your family, friends and everything you feel you have.
• Focus on your goals. Too much time in life is spent just hanging out on the couch and wondering why one hasn’t achieved. We are all caught up in the daily grind doing things that we do and really thinking about goals and if we are actually doing things to get to our goals.

A lot of great ideas, a lot of great concepts. I find a lot of value in this book. I just have a hard time handling the format and tone of the book.