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Yahoo to cut 15 percent jobs, close several units (reuters.com)
351 points by uptown on Feb 1, 2016 | hide | past | web | favorite | 301 comments

So I guess she did mean something when she said, "No layoffs...this week" [1]


[1] http://nypost.com/2016/01/18/marissa-mayers-job-safety-joke-...

It's incredibly sad when something like this happens. And I sure hope anyone who's found themselves out of a job, success in finding another. Even the "lower performers" still need to work. What I do hope for Yahoo, is that they're taking a solid look at who they consider expendable. Are self-important big shots also losing their jobs? Or are they too important to fire? When I see any company start to get rid of their engineering workforce, and keep all their managers, I get very concerned. It's a testament to how important these people think they are.

As for Marissa, I wonder how easy it'll be for her to find a job. "I bought Tumblr, I threw lavish parties when we really couldn't afford it... my company was about to go under until someone purchased it... BUT, I did get people to stop working from home!". "Hire me?"

Edit - Marissa, not Melissa.

Seriously, if you've ever worked at a large company in SV, you should know that the "lavish parties" thing was a completely envy-driven red herring.

If you do the math you realize that the holiday party cost a few hundred bucks per attending employee.

Compared to other large SV companies - that are not under fire in the press - this was a cheap holiday party.

Lavish parties send the wrong message to employees. If I were CEO I'd say:

"No more parties. We're going to use the to retrain employees (instead of firing them) and avoid layoffs."

Mayer is turing out to be a terrible CEO.

This article describes the various multi-million dollar parties.


That's not how it works. That's a terrible suggestion.

If you cut perks, your best and brightest will leave much quicker, the elves leave middle earth. And then your company is essentially screwed, because you'll lose all of your key personnel. And you won't save very much money. This is the way of the bean-counters who know nothing of human motivation and morale. $1000 per employee is less than a percentage of their yearly salary.

If you instead decimate the company, many who survive the culling will be thankful to the company that they are keeping their job, and you'll actually save ~10% in salary costs and future obligations.

(The clever employees who see this coming will leave way before either scenario anyway)

I don't think decimate is the correct term for cutting the lower 10‰ :). A true decimation would be 10% at random to inspire fear in all.

This is correct. When belts start noticeably tightening, I'm out the door (or soon to be). Companies know this, so it's typically business as usual before dropping the bomb.

If I were a "survivor", I would still rush to find a job elsewhere ASAP, while I'm still competing with the early round of layoffs (mostly below average) rather than with everybody else (the "best and brightest"). What's the point of waiting until the situation gets worse?

I don't believe that the "best and brightest" consider lavish parties as a deciding factor in where they work.

Notice how I phrased it. It's not cost cutting. It's about investing in employees. That is something the "best and the brightest" love.

I consider myself good and bright, but I won't claim superlatives. My take? I don't care about lavish parties. But if I noticed my company going out of it's way to be cheap, there's a problem. I don't nitpick on my business expenses or my billable hours. I get my job done and I do it well, and I expect to be treated like a grown up and compensated fairly. If the company throws a party but has a complex rule about who can and cannot bring a +1 or they obviously didn't want to spend money on a party but felt obligated to go through the formalities, then the relationship has become asymmetrical and I'd rather go elsewhere than start getting picky myself.

No, the "best and brightest" at a company are interested in the company investing in them at the expense of the dead weight.

They are also not very interested in training, because they don't need it. They want to work on cutting-edge projects.

"Training" is something that the poor performers are going to flock to, because it benefits them. Which is the polar opposite of what the top performers want.

I believe your distorting my original point, pouring your own prejudices into what I said, or I didn't explain myself very well. (Probably the last one)

Instead, I'll just point you to Deming's work on management. He transformed Japan's post war economy into the powerhouse it is today. He's also responsible for the much of the transformation here in the USA during the 1980'ss & 90's.

Long story short: it's the goal of management to make workers successful. Re-training is the absolute best way of advancing the company.


I think you explained yourself very well, you said that the company should cut perks and put the money into re-training employees to avoid layoffs.

Cutting perks will gut the company morale.

Re-training on the job is already available at most SV companies of this size. You want it, you get it.

The original article that called out the lavish party was explicitly doing so to paint Marissa as a CEO that spends frivolously, and the author wanted her to move that money from employees to the investors instead.

I don't think it's fair to say that it's the polar opposite of what they want, or to imply that all top performers feel the same way. Even the most talented junior developers could use some training, and if done properly it saves me time doing ad-hoc training/mentoring. A company's willingness to invest in its employees via training in particular is a positive indicator for me. Obviously this doesn't apply to early-stage startups and such.

One could argue that talented junior developers aren't the "best and brightest." They may be very good and bright, but the fact that they're junior means that they're less expensive to replace, and losing them has a smaller impact on your ability to innovate.

> "Training" is something that the poor performers are going to flock to, because it benefits them. Which is the polar opposite of what the top performers want.

I wouldn't be so sure. I love a good conference. I don't care much for the content, but the networking opportunities are great. I mostly do trainings to build my "Rolodex;" I feel that this will only help me when I decide on starting my own business (I want to sell something that other businesses will use, and knowing someone inside of a business >>>> cold calling)

That article is really damning. Makes it seem like she is going to cash out as Yahoo! goes down in flames around her. All she needs to do right now is keep it alive long enough to cash out all of her stock...

Someone remind me again why corporations pay their CEOs over 100m/year? And tell me about value, that's a huge chunk of change for someone in Yahoo!'s position, they could use that money to keep employees working.

First, I don't think Mayer makes over 100MM per year, or anything close to that.

Second, CEOs get paid lots of money because the market punishes firms that aren't growing and have no-name CEOs, and the cost of a name-brand CEO is probably more than cancelled out by avoiding that penalty. By the time Mayer was recruited, the market consensus was that Yahoo needed a turnaround CEO. There are no cheap turnaround CEOs for companies managing 4-5B in annual revenue.

Mayer's entire yearly salary is a rounding error compared to the total headcount cost of operating Yahoo, which is widely believed to be both tremendously overstaffed and larded with third-party contractor contracts.

Further, ask yourself: what exactly does it accomplish for Mayer to forego a salary in order to keep 1% (check my math, I might be way off) of Yahoo's workforce employed if that workforce isn't doing anything to improve Yahoo's outlook? Yahoo isn't a charity: everything it's employees do ostensibly have to have some hope of providing a return on investment.

There is an inverse correlation between CEO pay and performance.


But, by summing your post and the GP, one can easily hypothesize that the causal relation goes the other way around: sinking companies hire expensive CEOs to try and save themselves. Often that doesn't succeed, because the company was sinking for reasons deeper than poor leadership.

The real question is: do success rates improve for sinking companies that hire a expensive CEO versus those that keep their existing leadership or hire no-name CEOs?

Is it possible that firms in trouble need to offer higher compensation to attract and retain CEOs?

I skimmed the paper and couldn't find a counter argument, but I didn't understand all the jargon.

The figure is based upon stock options and bonuses.

It's here in this picture:


That's still not close to 100MM/yr and it's contingent, but look, we probably all agree that Yahoo's investors didn't get their money's worth on a marquee CEO.

It is, however, weird to me that everyone's so quick to blame Mayer for that. She didn't make up the game. The game stays the game. If it wasn't Mayer presiding over the decline of Yahoo --- probably still after acquiring Tumblr! --- it'd've been someone else.

> we probably all agree that Yahoo's investors didn't get their money's worth on a marquee CEO

Disagree. If you bought YHOO in mid-2012 before Marissa joined, you'd have doubled your investment by now. I understand there's the option value of having invested in some better stocks, and YHOO's correlation to BABA, but one could still do a lot worse than doubling the investment.


Yes, but she had nothing to do with the stock price rising (all due to BABA's rising value).

If someone offered me a shitload of money to run a sinking ship, I would have taken the job, just as she did. With this level of compensation, she's all set for life, does not need another job ever. But, with her connections and name recognition, she will have no trouble finding one - trust me. It is a systemic problem with boards of directors hiring incompetent (but well-known) executives who keep screwing up one company after another. All about connections.

> she had nothing to do with the stock price rising (all due to BABA's rising value).

The decision to keep the BABA chunk versus spinning it off or distributing it to shareholders was CEO's decision, there were other interests at play urging other outcomes.

She still had a handle on the cost structure of the underlying business - expenses related to employee headcount, office leases, new project investments, outsourcing vs keeping things in-house - impacted the stock price to some extent, things could've been much worse.

I think she was set for life well before Yahoo! offer, and in light of recent developments with GOOG her Alphabet holdings might have appreciated at faster pace than her Yahoo! holdings.

Moreover, her decisions are not terribly out of line with her predecessors' decisions - Scott Thompson and Carol Bartz layed off, outsourced and cut expenses as well.

Could she have done a better job? Perhaps. Was she the absolute worst CEO Yahoo! could've landed? Probably not.

Well I think back then she was the alternative for turning the company before it sank, but couldn't cut/steer fast enough

Columns from cringely paint a interesting, changing picture over the year http://www.cringely.com/tag/yahoo/page/2/

I have a lot of disorganized thoughts on this issue. Please bear with me as I try to gather them together.

For the sake of exposition, let's say Mayer makes some $$MM/y, the exact number isn't really important to my point past a certain level, which she most certainly is.

What is she being paid that amount for? Let's explore each of the obvious options I see, and an expected common reaction (Had written logical, but that's not what I meant, since many common reactions are far from logical).

- To restore the company.

This clearly did not happen, if this was her job, she failed at it, and for most "normal people", getting paid that $$MM/y seems very off compared to what we might receive in such a failure.

- To as you say, preside over the decline. (age gracefully)

The argument I'll pose for the anti-Mayer sentiment in this case can be applied more broadly, but is most fitting here. One might expect this sort of role, in parity with firings, would include policies of waist tightening at all levels. I'm not even making a stance for or against these things in this argument, but the press about a slew of very exorbitant and very material benefits when paired beside firing of boots on the ground (again, not taking a stance, just observing the contrasting sentiments) give the _PERCEPTION_ of "let them eat cake", to put it glibly.

- To as you say as well earlier, be a face for the markets.

If we chose this explanation, realize the "figurehead effect" is a two way street. A famous CEO makes markets look positively on the company (is the thesis) regardless of the company, so if a company is doing badly, should not that emphasis also be on the CEO? It seems disingenuous that the CEO gets the credit for success but not for failure. I'm not saying this is logical, but it is consistent to placing significant value on a figurehead.

This last argument is the weakest, given that the markets probably take into account perceived CEO skills as part of "figurehead" status, but the BROADER market (sentiment of the people) likely can't inspect that deeply. So if the financial market loves kingmaking, the people get to see a king, and have their own expectations which do go both ways (in terms of lionizing success c.f. elon musk, and demonizing failure)

At the end of the day, each of these universes results in a very negative sentiment towards Mayer, thus my not being as surprised at that outcome.

Marissa was explicitly and publicly hired to turn around the company.

She's being paid to take the personal risk of career-ending failure. It's a way for her to hedge the bet she made that she could turn the company around.

This goes for all CEOs, the high salary is not compensation for labour, it's a risk premium the shareholders pay to get someone to take the job. For example, in many jurisdictions, the CEO is personally responsible for certain crimes that employees are committing, e.g. the CEO can go to jail if the company commits tax fraud.

That said, it's also a complete old boys' network and the risk premiums are extremely inflated, but that's nepotism for you.

That seems more historical than anything. I don't know the last time one of them has gone to jail for much of anything, you're very right about inflation/nepotism, as well.

And I don't really think anything is career-ending for that matter. I mean, look at the mess there was after Carly Fiorina and she's found other things to do.

Sure; I accept the explicit reason, my above was just to enumerate a few of the most common ways I saw people thinking about her/any CEO's position in this sort of situation.

Your final line re: network/inflated premiums seems to agree with the broader sense of what I was saying, unless I'm misunderstanding?

I'm pretty sure we are in agreement. :-)

It all depends on whether those same people would be just as quick to credit her if she had in fact managed to turn Yahoo! around. Personally I don't think it could have been done, it was just too far gone in terms of momentum.

I was at Yahoo when Carol Bartz came in and did exactly that. And guess what? Morale plummeted.

"The beatings will continue until the morale improves" .... ever heard of that?

Do you have a reference to that? I can't find any evidence that Carlo Bartz engaged in any retraining of employees.

Again, I'm not suggesting cost cutting. I'm suggesting a move from frivolous expenses, to those which help make the employees more successful.

As I commented before, Deming was all about training employees over firing them.


Perks in SV companies are absolutely not frivolous expenses! They are a necessary expense to attract and keep the right talent, in competition with other SV companies that also offer generous perks. If you cut it, morale plummets and you will lose a lot of good employees.

The link you posted contains great tips for assembly-line factories filled with replaceable hourly workers. SV is.. not that.

I was there when she cancelled the year-end party.

She had the same effect at Autodesk by applying the same philosophy.

Culture and momentum are real and important parts of workforce morale. Killing them off, will actually send the wrong message to employees.

I've been at companies who followed the above and ended first an annual 4th of July party, then scaled back the Christmas holiday party, then started cutting semi-regular, informal, socialization activities over lunches and what not.

There was nothing more damaging to morale at that firm than killing the few times a year we got to have a bit of fun on the company's dime. We worked hard so the CEO could buy another house, and the reward was "no bonuses, no parties this year." I watched the life drain out of that place.

Killing employee morale activities costing millions won't save jobs lost by spending billions or implementing anti-employee policies.

I don't work for a large company in SV, but do work for a large company of a market cap of almost 50 billion (larger than Yahoo).

We had record profits last quarter. Our market is growing. And we don't get jack squat for perks. We come in, work, go home. No holiday parties. Not even free coffee. I used to complain...actually still do. But, that's the expectation now. Hope it improves, but not holding my breath.

On the other hand my salary is 10% more than my previous company which had free snacks, Christmas gifts, etc.

I worked at companies with all of the perks, and I've worked at companies with almost none. While I'd much rather prefer higher cash compensation over workplace perks, I'd be more likely to stay longer at a place that had a few creature comforts.

Yes I agree...it increases morale and team building. I actually wouldn't mind if the company took $500 out of my paycheck and have a 'fun' fund for perks. But I would imagine not all my coworkers share the same view. Also I think some is up to our local managers.

For example we just had a 5 day architecture design workshop...people from different parts of the US flew in to participate. So that's flight, hotel, rental car, meals, etc.

However we only got breakfast one day, and no lunch. To me it makes sense to provide food to get people to come in early and have light discussions over food. Make more use of everyone's time.

+1 to this.

You'd have a hard time arguing against a year-end party.

If the company is not doing well, it's a morale booster.

If the company is doing well, then hey, why not have a party?

A few hundred bucks per attending employee for a Christmas party is a lot by most working people's standards... probably like 12x + what their company would spend.

Yes, by most people's standards, which is why the piece is working, it creates envy in a lot of people. Same with the "free food" spiel.

But Yahoo is competing for Silicon Valley software engineers, and perks are very common, so if you don't have free food, free snacks, office parties, events, and other benefits, you'll have to pay your employees a lot more.

Perks are incredibly cheap for the company, because people value them much more than they would the corresponding pay raise.

So if you don't understand this, it looks bad that company "wastes" millions on perks, because you don't see the many more millions it saves on salary.

Perks are incredibly cheap for the company, because people value them much more than they would the corresponding pay raise.

This is so obviously true that it's a cynicism generator on HN, with people routinely commenting about how Google's free food is a kind of scam. But what's true and what rings true depends on the prevailing narrative, and the prevailing narrative about Mayer and Yahoo is that she's fiddling while Rome burns.

Enough with the free snacks and parties.

You know what I want as a perk? The company turns off at 5pm. That's it, no more work, go home, no exceptions. Company email shuts down, no access on your smartphone until 9am.

Now that's a perk. I'll buy my own junk food[0], and I'll go to parties with my friends, not my coworkers.

[0] or, well, I won't - another problem with the perks, I want to snack on carrots and skim greek yogurt, not chips, candy, and beer.

> You know what I want as a perk? The company turns off at 5pm.

That's not in the interest of most companies, so you'll have to start your own if that is what you want.

> I'll go to parties with my friends

The holiday party is completely optional. Most employees didn't go.

> I want to snack on carrots and skim greek yogurt

Our snack fridges are full of that, there's more healthy snacks than unhealthy around.

> That's not in the interest of most companies, so you'll have to start your own if that is what you want.

It's in the interest of companies to have happy employees. Following respectful working hours is one of the ways to do that. Doesn't have to be 9-5, if 10-6, 11-7, etc. is more of your thing.

I don't care about free food, I care about work/life balance. Office parties and free food type perks, which are just intended to keep you at the office longer, worsen my work/life balance.

* > You know what I want as a perk? The company turns off at 5pm.*

That's not in the interest of most companies, so you'll have to start your own if that is what you want.

Nor is it in the interest of anyone with delayed sleep phase. Maybe a more universal form of that perk is "the employee turns off when they leave the office, but can choose their own hours".

SV companies serve carrots and yogurt alongside the chips and candy.

I see your point, but to be honest I'd probably pay not to have to attend Christmas parties at many places I've worked at. I suspect I'm not alone in feeling like this. Point being I don't know that this is really much of a perk......

Company Christmas party = another night that I can't spend with my girlfriend, lifting or climbing at the gym, reading, working on open source... and anything else that isn't hanging out with increasingly intoxicated people.

One night a year is onerous? For an event that it seems your coworkers enjoy?

We spent, I'd say, over $1500 for our party at a company of 15.

Yes, I would prefer a $100 bonus. The amount might decrease to the point that it's useless at larger companies due to economies of scale...

I think a more interesting question is: Would you rather get $100 or allow the other members of your team to attend a party they'd enjoy?

Hm... is such a party both a) deductible as a corporate expense and b) not treated as employee income?

If so, the choice is really between "$100 worth" of partying and $65 of after-tax cash.

For that matter, do corporations pay sales tax? If not, it's more like $100 of partying vs $58 of your choice of any consumption.

(Hence why it's not always as simple as "just give me the money".)

Do they force you to go? Every company I've ever worked at had optional parties.

Me to i only worked at one place(subsidiary of Elsevier) that did the mega party thing.

I didn't go to the first two and only attended after that to make nice with teh boss.

I dunno. Can you show examples of more lavish holiday parties? For one, there aren't that many SV companies of similar size. Secondly, a lot of the ones of similar size aren't WWW/software companies, and they have a lot slimmer margins anyway.

Tubemogul threw a ridiculous party in 2014. My neighbor was the event planner. I wouldn't be surprised if the cost per employee was way higher than Yahoo's.

> Melissa


> I wonder how easy it'll be for her to find a job

Marissa's net worth is well into nine figures. I wouldn't worry about her too much.

And she can always run for president as a Republican.

That's a much more fun thing to say than "person tasked with impossible job fails to do the impossible".

From the comments on this part of the thread, you'd think Yahoo was some kind of Internet colossus before Mayer took their reins, rather than an overgrown relic kept alive and profitable through sheer inertia.

Impossible? Yahoo had gross income of $4.6B in 2014. That is one hell of a cash flow stream. I find it very hard to believe that turning that into a profitable venture again would violate the laws of either physics or economics.

I think a much more likely explanation is that Marissa failed because she brought no new ideas to the table, and also made a whole bunch of boneheaded blunders like this:


and this:


while she unashamedly pocketed $36M for her first six months worth of work.

It had a top-line of 4.6B, but 1.2B in fixed costs and a little over 3B in payroll expenses.

Yahoo's problems have absolutely nothing to do with Mayer having a "nursery" put into her office. She could have taken minimum wage and no other compensation, and no part of this story would have turned out differently, except they might have sold the company by now.

Arguments about Mayer's performance on threads like these are frustrating because the consensus (elsewhere, not here) seems to be that her first order of business should have been a significant layoff. But at this point, now that we have lurid stories about logos, nurseries, and poorly-timed jokes, there's no winning: their core business has been on a downward trajectory since long before she took over, and nobody believes they're appropriately staffed.


For what it's worth, if you look at what I'm saying, nowhere am I claiming that Mayer is a good CEO. But I have doubts as to whether a good CEO could have done much to change the outcome here, except perhaps by fetching a better price at auction for Yahoo.

> Yahoo's problems have absolutely nothing to do with Mayer having a "nursery" put into her office.

Of course they don't. That's not the point. Putting a nursery in her office was not a boneheaded blunder because the cost of the nursery (or her salary) made the difference between the company succeeding and not. It was a boneheaded blunder because at the same time she put the nursery in her office she also rescinded all telecommuting. That had an understandably (and predictably!) devastating effect on morale. The message was: I (Marissa) deserve to have this perk that makes my life more convenient, but you, silly rank-and-file employee, do not. I don't even care if you can demonstrate that you can be productive from home, I don't have time to sort that out. I'm much too busy and important for that sort of trivia. So you're just going to have to suck it up and deal with your commute.

> her first order of business should have been a significant layoff

Could be. Whatever it is she should have done, she manifestly hasn't done it yet.

> I have doubts as to whether a good CEO could have done much to change the outcome here

People were saying the same thing about Apple before Steve Jobs came back. Sadly, in this case we will probably never know because that experiment will never be done.

Are you looking for someone to argue that Marissa Mayer was Steve Jobs? I'm the wrong person for that.

I'm saying something simple. You claim that Mayer had 4.6B of cash flow to play with turn around Apple. My response is simply (a) no she didn't, and (b) to the extent she had real revenue to work with, it was an encumbrance: she was tasked with turning around a company for which 30% of its income was people routing their search queries to Yahoo. It's hard to think of big moves you can make that don't somehow jeopardize that revenue stream. She's boxed in.

(Then you look at the activist shareholder critiques of her tenure, and it's like, "she spent 10MM buying iPhones for everyone on her staff", and I'm like, it's fucking 2014, almost nobody but Apple has figured out how to make huge amounts of money on mobile but pretty much everyone thinks it's the most important thing in the world to do, and she's, what, buying the staff computers to do that with? Sheesh.)

Did she rise to the occasion and do something unprecedented in business history, like Jobs did? No she did not. Executive hired to do the impossible fails to do the impossible, film at 11.

> She's boxed in.

Certainly turning Yahoo around was never going to be easy. And it can be difficult to distinguish between "impossible" and merely "hard." We cannot possibly settle that question here and so there's no point in getting deeper into those weeds.

I will point out this though: I'm choosing to give Marissa and the Yahoo board the benefit of the doubt and assume that they disagreed with you, that they all thought it was possible. I'm also giving them the benefit of the doubt in assuming that they weren't necessarily wrong. Because the alternative is to believe either that 1) they are all idiots for thinking it was possible or 2) that they hired Marissa knowing full well that she was going to fail no matter what she did, and she accepted the offer and pocketed the $36M for her first six months on the job knowing full well that she was going to fail no matter what she did. That seems to me to be a much more damning accusation than anything I've said or implied. That they undertook a clearly impossible task is not actually a defense for a CEO who accepted an eight-figure salary IMHO.

It seems that you're saying something that is impossible to disprove: that no one could have fixed Yahoo. I'm skeptical, but I guess we will never know.

What I do know is that at the time of her hire, on these very boards, people were singing her praises for the most part. Because the Valley protects its own.

Steve Jobs isn't the benchmark here. Maybe it was an impossible task to right the Yahoo ship, but what exactly did she do that was positive or innovative...at all?

When Mayer took over at Yahoo, I thought it could go either way-like everyone else. These tech companies are really about perception. I was waiting to hear, "Look at what Yahoo is doing!". Just didn't hear it.

I was suprised she didn't fire more people.

I thought it was a mistake to bring all telecommuting employees in.

I know she meant well, but all she did was irritate employees. There was no way these employees were going to bond, and magically turn into a Google love fest.

For some reason, I still think about happily doing your work at home, and then having to come into work and bond. Yes, I think it's important, at innovative companies, for employees to be present, all around the camp fire, but it's someting that needs to be done from day one.

In my world, I still stumble upon a yahoo page, but it's usually by malware on my old laptop I just haven't fixed. I'm glad they haven't changed their look, and then suprised.

Yahoo reminds me of just how dispensable these companies are in the bigger picture. Yahoo could dissapear, and I wouldn't even flinch. I don't even know anyone with a Yahoo email anymore.

Their next CEO should be an unknown, who's really into his/her tinkering stage in life. Young, crazy, motivated, bursting with angst. Gave this person a strong financial team, but don't hire the right looking candidate on paper.

If there's no difference in whether she would've been paid zero dollars, then thats a pretty good argument that they should find someone that will take zero dollars - just find someone that wants to commit reputation suicide!

Remember Apple when Jobs took it over? 90 days from bankruptcy, and written off by most people. Getting the right CEO is enormously important, and not impossible.

No I don't remember them being "90 days from bankruptcy". They had a cash hoard the envy of many U.S. states, a small but loyal group of paying customers, and a number of sources of actual non-hardware revenue from key inventions and licenses. And they didn't have a bunch of employees from legacy business deals to find homes for.

What Apple lacked was a clear focus on what their business needed to be, which was selling hardware, not licensing the OS or making business software, or any of the other bad ideas they had from trying to compete with Microsoft directly.

What no one here or anywhere else seems to have an answer for is "What is Yahoo's core business". It used to be the Yellow Pages for the Internet, and now it's basically a Media company with some legacy stuff like web email.

"Apple Was 90 Days From Going Bankrupt"

  -- http://thenextweb.com/apple/2010/06/02/steve-jobs-90-days/#gref
"At an executive Session of the board in June, with Amelio out of the room, Woolard described to current directors how he calculated their odds. "If we stay with Gil as CEO, think there's only 10% chance we will avoid bankruptcy," he said. "If we fire him and convince Steve to come take over, we have 60% chance of surviving. If we fire Gil, don't get Steve back, and have to search for new CEO, then we have a 40% chance of surviving. "The board gave him authority to ask Jobs to return."

  -- "Steve Jobs", Isaacson, pg 314
> What no one here or anywhere else seems to have an answer for is "What is Yahoo's core business".

That's probably indicative that we are not CEO material :-)

He was being a little hyperbolic there. Which is one of Steve Jobs' tendencies. They had "90 days of working capital" left, but it was still $1.2B and they had annual revenues of $7B in 1997 and pretty much no debt. They had to replace the CEO to restore investor confidence, and Jobs was clearly the best choice, but they could have found a different CEO and muddled through.

It was the worst state the company had been in, but the losses had stopped even before Jobs took over. Not to understate Jobs accomplishments. Just saying a competent CEO could turn Apple from a doghouse company to a profitable company. It took a genius CEO takes a company from the the doghouse to the most valuable in the world.

Outliers shouldn't be presented as typical data.

Outliers are perfectly valid responses to claims of "impossible".

Oh dear, you are correct. My thoughts seem to outrun my fingers from time to time. Marissa.

Yes, I hear this idea that once someone has made this much money that they are fine just stepping out of the game and living off their earnings. But one doesn't stay a part of the Triple Comma Club™ if they spend like she was spending as CEO. (without some sort of replenishment)

> But one doesn't stay a part of the Triple Comma Club™ if they spend like she was spending as CEO. (without some sort of replenishment)

Her net worth is around $300 million. I'm sure she could maintain her spending habits off interest alone.

She has organized fund-raising events for the Democratic Party (Hillary, I think)

These sort of comments always annoy me.

If you work at declining companies like Yahoo, HP, etc you should already consider your job lost. Just show up for the paycheck while planning your next move. This has to be what >90% of people are doing as-is. People aren't that stupid... are they?

This is CERTAINLY not the last round of layoffs at Yahoo as it positions itself for sale. Same goes for every declining business in every industry in every country in every era of business history.

Actually, a lot of smart people have returned or joined Yahoo lately, since Marissa took over. And they aren't in it for a 9-5. They support a lot of great open source work, which helps them get good people.

I've known people who've spent most of their entire careers in declining market companies. It's not necessarily a terrible place to work for everyone and at the end of the day it's a paycheck all the same.

Technology eating technology.

It's only a "surprise" for a society that does not yet understand to what degree technology is about to create power monopolies of unseen magnitude.

In principle, Google could become the Internet.

Oh wait...

How many tens of millions is she guaranteed to walk away with again? Does she really need to ever work again? Hell, will her children?

How much do you want to bet she will start her Venture Capital firm after this debacle?

Tumblr gets little respect but it was one of the better purchases Yahoo made. It actually generates revenue. Many of the others were shut down months later with neither revenue, talent or technology to show for it.

Oh man, what are the developers DOING at Tumblr? I tried using their api but got stuck requesting xAuth access for my application. Haven't heard back from them yet after several weeks.

Do you have a source for this? I can only find posts from several years ago saying Tumblr will soon be profitable.

About a year ago Yahoo said they expected Tumblr to generate $100 million in revenue (not profit) in 2015. I'm not saying Tumblr is profitable (don't think they ever said) or it was a great investment (cost $1.1B in 2013) but at least it generates significant revenue and uniques have around doubled since they bought it.

That was a RELATIVELY good purchase.

That $100mm target was not achieved last year. I don't know what sort of revenue Tumblr actually generated in 2015 for Yahoo, but it seemingly wasn't $100mm and it definitely is nowhere near profitable. A few points:

- Tumblr was reorganized and lost its independence [1]. Not a sign of happiness with their progress.

- Tumblr has an enormous third-party CDN bill, to the extent that even $100mm of yearly revenue wouldn't come close to covering the expanse. Their traffic levels are greater than those of some entire CDN providers, and the rates they negotiated were not particularly rock bottom. Yahoo has to get out from under that situation to ever make Tumblr a profitable enterprise.

- Tumblr has very little monetizable content. Yahoo ads on Tumblr sites have still not come to fruition after several years of management claims that it's around the corner. They will presumably face a user revolt if and when it does roll out. Display ads only appear in the admin dashboard, which has far lower hit rates than the public facing sites themselves. The vast majority of sites are permanently non-monetizable because they are one of: porn, illegal content, branded corporate sites like yahooeng.tumblr.com. Yet to discard sites like those is to severely damage Tumblr's traffic rankings, which is the only thing they have to sell ads against (if they sold ads).

I see a lot of similarities between Tumblr and a Yahoo acquisition from a previous era: GeoCities. They're both instances of Yahoo spending too much to buy what they think is the latest hot thing that will build their userbase, and instead getting nothing in return but a giant bill and a no way to gain money or prestige off of the product.

[1] http://www.businessinsider.com/tumblr-is-getting-sucked-into...

Not sure about everything you say but it looks like Tumblr didn't reach the $100 million revenue goal for 2015. They even marked it down $230 million.


There's also the strategic issue: if you believe Yahoo has to have a foot in "social"† to remain relevant and continue commanding the ad dollars from search and their site network, Tumblr was probably the most credible social network they could have bought; they got it for $1.2B. Who else could they have bought?

for want of better term

She never has to work another day in her life. She'll do just fine. The older workers who are being shitcanned and forced into involuntary early retirement, however, do not have that luxury.


Yes. I have a degree in Graphic Design... can confirm.


Nice. Anyone staying at Yahoo despite a continuous, management-driven, downward spiral was already laying themselves off. Just a matter of time. That was before she even entered the picture. I respected her attempt to rescue one of the greats of the Old Web but it was beyond salvage. Now, it will be streamlined, gutted, and sold most likely. As financial management wanted all along...

I know it is popular to hate on the finance industry and management and all, but...honest question here...was there really a better solution?

Not trying to discount the human element as it absolutely sucks that many people will lose their jobs. But reallocating that capital that was tied up in Yahoo and clearly not doing any good there seems like an overall smart move if it couldn't be saved.

What would a better alternative have been?

Depends on one's goal and perspective. Finance people's goal is to squeeze money out of an investment. This is why most companies in Silicon Valley wont stay: they're built up on lies to employees and customers to eventually be sold at greater value and gutted. That was what finance wanted to do to Yahoo for a while. They also put in place one bad leader after another with a similar philosophy that damaged the company. This philosophy ignores customers and workers entirely.

My philosophy is more stakeholders than shareholders. Hers apparently was, too. It says at least make an attempt to innovate your way out of a bad situation to get a win for everyone. She tried that with an impressive effort. Ship long sailed, though, so she failed as I expected. Now, with efforts attempted, it's morally right in my model to abandon Yahoo and re-invest that capital. Workers and customers should definitely jump ship, too, if they can.

While we're at it, consider Amazon. Every piece I read for years was how they should do the same do to no or low profit. Yet, they pushed forward with growth and one innovation after another. One set of those became Amazon Web Services. A mini-revolutiom in IT followed. Would you rather they had just listen to finance people and quit long before that? What would cloud market look like?

Please don't take my comment the wrong way. I actually fully agree with everything you are saying.

I just don't think that was even possible at this stage of the game for Yahoo what with their shareholders calling for blood, their weird relationship with Alibaba such that Yahoo's corporate structure is essentially their product, management issues, lack of vision, etc.

So once something gets to that point, I'm not sure it really is possible to turn it around. So the next best thing is reallocating that capital to things that can move forward in a more productive manner.

But again, I absolutely 100% agree with "stakeholders over shareholders." Just don't think that is realistic with this particular scenario.

"Please don't take my comment the wrong way. I actually fully agree with everything you are saying."

Oh that's cool. To be clear, I wasn't taking it as anything: just an opportunity to explain what my reasoning was. Especially here, I figured there would be people on both sides I mentioned. Hence presenting it that way and being clear about my own bias.

"I just don't think that was even possible at this stage of the game for Yahoo what with their shareholders calling for blood, their weird relationship with Alibaba such that Yahoo's corporate structure is essentially their product, management issues, lack of vision, etc."

Oh yeah. I totally agree. It appeared to be beyond salvage. It's why I thought the results she got were impressive as I didn't expect it to even go that far. I might be wrong about whether it was a good move to make the attempt. It could've been foolish given how bad the situation was. I'm open to that.

I was just glad she gave a damn enough to try something rather than soak up money and gut it. It's all I see with so many tech and other companies that had a lot of untapped potential. I wasn't sure what was left for Yahoo but they had plenty of tech, smart people, & ad connections. So, I like that an effort was made which actually should've been made years ago by other management.

Meanwhile, the process of getting rid of it begins. And I still have to dig back through Yahoo email in case I missed anything important. Before they delete it...

Yeah, the "stakeholders" should get rich at the expense of the people that actually OWN the company. I'd love to see the innovation that would happen if this were implemented at scale.

>She tried with an impressive effort

That's one way to view it. I'd say it was a pretty expensive, unimpressive effort.

>rather they had listen to finance people

Uh, you realize that it's also "finance people" that have been standing behind Amazons rise as well, right? Just because you read a couple of articles on HN about activists wanting to see profits, in no way does that represent all "finance people". Amazon has a lot of shareholders. Like it or not, "finance people" aren't some homogeneous group of self interested, greedy trolls.

Yeah, the "stakeholders" should get rich at the expense of the people that actually OWN the company."

Look up Publix or Costco for an example of stakeholder model working in low margin industries. Probably could work in high margin tech.


"That's one way to view it. I'd say it was a pretty expensive, unimpressive effort."

Feel free to offer a different set of recommendations that would've turned it around..

"Just because you read a couple of articles on HN about activists wanting to see profits"

Just discovered HN recently. Try most articles in the media and finance people they interviewed. People were either impressed with their consumer value or talking about how they were a failed business in the making. Rarely saw an exception when the name came up.

Could've been some media bias that made it appear one way while real opinion of investors was different.

I'm not sure what definition of "better" would apply but I'm certain there is a non-zero number of people who would prefer to see yahoo slowly die while paying the last of its money out to workers.

Ok, fair enough. But is there any legal framework in which that could possibly happen given shareholders and their legal interests?

I'm asking for realistic alternatives. While I appreciate the thoughtfulness of your approach, I wouldn't exactly consider that realistic.

Why would that be illegal? There is nothing illegal about having other priorities than maximizing shareholder value. See https://en.wikipedia.org/wiki/Fiduciary#Fiduciary_duties_und....

Those people should probably join a co-op or a non-profit organization then, for-profit publicly-traded corporations are not really set up for that with shareholders buying shares and firing boards and hiring new management and what not.

companies are for shareholders, not workers

That's one philosophy. The philosophy of my company is that the management team has an ethical responsibility to consider the interests of employees in strategic decision making. I am certain this is the only way to build a healthy long-lived tech company.

Exactly. And the sooner more companies' management as well as workers realize it, the better it will be for all concerned.

i think it's fair (and prudent) to consider workers in strategic vision. on the other hand, to "slowly die while paying the last of its money out to workers" is not reasonable

But to quickly die while paying out the money to owners of preferred stock is okay?

>companies are for shareholders, not workers

Companies, whether it is admitted by them or not, are really for stakeholders, not just shareholders, and stakeholders includes employees; or least, wise companies will act as if that is so, even if it is not so legally on paper.

You can also do it on paper. Make your VC shares subordinate to your employee ISO pool. Talk is cheap ;-)

Well that may be a better idea but they actually have to do it. What I meant was, if they don't behave that way, people will increasingly leave - when they can.

Have you never heard of a corporate charter? Shareholders are a component of a company, but not the reason a company exists.

Sure, so what does Yahoo's corporate by-laws or S-1 say?

The problem is that they already sold shares on the premise of being a for-profit entity extracting values to their shareholders.

They could have become an employee-owned co-op or a non-profit entity like Wikimedia or Craigslist, but at some point they chose not to.

PUBLIC companies are for shareholders, now workers. Private companies are another issue.

It gets worse.

Marissa Mayer accidentally fires dozens of employees: http://nypost.com/2016/01/30/yahoos-marissa-mayer-accidental...

Which is a rumour and hasn't been confirmed?


It sucks to be laid off, but they're better off in the long run to get away from a company with leadership like that.

(In over 20 years) I've been laid off 3 times.

I know how much it sucks the first & second time, but once you see the warning signs there is no glory in hanging around.

For me, being laid off (or resigning) is just another skill I got better at (like learning a new tech stack or framework).

You are right, with leadership like that, the environment must be toxic...

Jeez, that's so awful.

It was a friday, so a joke!

Sure it was a joke... but it doesn't get any better when you think about what the joke was.

Typical ivory tower lack of awareness and humility. She would make a great politician.

Fridays are not funny days in the corporate world !

love it.

Yeah, haha. Really funny that all those people lost their jobs. Great stuff.

I feel bad for the 15%, but this was necessary. They are severely over-hired. I've gone over there a few times to talk to folks and it's clear that they have a lot of people that are basically making work for themselves because no one has any work for them that actually helps the business.

This is one of those things that folks learn over time. I've met masters of the "busy people" who, with no direction whatsoever from above have full meeting schedules, generating reports and presentations and white papers and generally "working hard" but it is all just running on a treadmill as far as I can tell. They are exercising their "execution" habits while waiting for something to actually do. It sort of amazed me when I recognized it for what it was.

Interestingly they seem to hold there jobs while people who just stop doing anything with no direction often don't hold their jobs. So it is presumably a suvival trait.

One of the more interesting things my manager at Sun told me was that the difference between a leader and a worker, was that a leader was a going somewhere and a worker was helping them get there. So if you want to be a leader you need to have some place you are trying to go. It gets you into trouble though, when there is only enough energy to follow one or two paths, it puts you on the short list for removal if your path isn't one of them.

>all just running on a treadmill as far as I can tell.

Unfortunately, people lose their minds when some company announces layoffs, like some purposeful social harm is being done, yet somehow when a company is having massive hiring no one really questions how much of that is valid or sustainable. People become like you describe; they master the do nothing job via office cult cargoism. It must be exhausting to have a 'fake' job like this and knowing damn well that if you lose this job you may have nowhere to go.

I think 100 years from now our great grandkids will be living in an automation utopia and look at our daily work lives as something just a harrowing as any story from Kafka. There's a lot of craziness we let slide because we've convinced ourselves total employment is one of the main moral goals of a capitalistic society. Its probably not sustainable in later stages capitalism.

In my lifetime I expect to see GMI deployments in various nations as automation keeps eating the world. I have yet to be convinced that the status quo can be maintained and the cracks on the facade are already showing. Later stages capitalism is a totally different beast than early stages. This is all new ground.

Not too long ago this sounded like crazy sci-fi talk to me, but now that I'm in a partial management position I've been involved with hirings/firings and all sorts of staffing and productivity issues, this has shown me that employment in general is something of an illusion. I'd say 80% of the work/value done here is by 30 or 40% of the staff, maybe 20% if we're being really tough. A lot of hiring, if not most, is vanity hiring by VP's who want more people under them for status and budget reasons. This isn't some rational engine at work here. Its its own kind of bubble and as we saw in the 2008 mortgage crisis, it gets deflated pretty easily when money stops coming in. (5% to 10% unemployment in 12 months 2008-2009).

Hi, throwaway with a "fake" job (with quotations because usually 25% of the time I am busy).

It is incredibly frustrating to me, because I consider myself a creative and capable individual, who is just fresh off graduation. However, I have a micromanaging, closed-minded rude boss (company lingo: "Leader"), who I prefer to avoid at all costs. At the same time, he seems completely aloof and uninterested in my career goals, which explains why I have nothing to do most of the time.

This is further led to absurdity because I'm in a Trainee position, someone who is paid a better than everyone else at their level of responsibility and gone through extra training with hopes they will ascend to management. I get no training either.

I've been looking for another job for over a year and cannot get anything else because of lack of experience and a nation-wide political+economical crisis.

If you are smart enough to enjoy reading Hacker News, you might be smart enough to learn programming.

Decent programmers are still very much in demand, no matter what nation-wide crisis you are talking about.

I hope you're right, I want you to be right. But honestly, I can't see it. A lot of what we do essentially lives on credit. We're like real estate. We're in demand as long as there is a buyer. Essentially, buyers will cease.

We're not doctors, cops nor lawyers, the world won't cease without us. Hell, even civil workers in governments although less salary, have better safety than we do. I can't shake the feeling that essentially we'll realise that all these companies we work for don't really "exist" as they're just the imagination of someones account balance. At some point its gotta run dry.

My employer has just made `most valuable company'. I am not too concerned. They make a pretty dime, too.

I do know programming, and I enjoy it very much.

But I work in a financial department where it's an alien concept, and as such, unauditable and dangerous. I barely get opportunities to put it in action these days.

I feel your pain.

Unauditable is a fun accusation: you probably use spreadsheets---and they are notorious for being write-only.

You can form a longer term plan to leave that industry and join the tech-industry.

By the way, today I had a meeting with an IT coordinator in a sister-company. He knows everything about SAP. However, he had no clue as to what "Python" is.

I work with dinosaurs apparently.

The SAP ecosystem is its own little world. Nothing to do with age: Python has been around since the late 80s (even though it's only been popular for shorter).

I once did an internship at the SAP mothership. They have good food.

>> I'd say 80% of the work/value done here is by 30 or 40% of the staff, maybe 20% if we're being really tough

Makes sense. But are aren't we seeing such inefficient companies crumble ? Everything is so monopolistic?

What advice would you give to someone who has a pretty well paying job in an tech company that has over hired ?

On the one hand it's harder to find better jobs as the present job is already kind of nice. On the other hand there's the uncertainty of where everything is going with regards to your long term future at the company and your career.

You can't bring up the fact that the team is bloated because you're basically telling them that you should be fired.

A very awkward position to be in.

> no one has any work for them that actually helps the business.

What is their business now? Having no work is a leadership problem. If there really is no work then layoffs are a must, but the company is floundering around with no real direction....

This, IMHO, is the crucial point: what exactly is Yahoo's business?

As an outside watcher I have no clue (I am also stupid). Hopefully people working there have better insight than myself.

In case anyone wanted a real answer, it's just advertising, as it has always been:


"We generate revenue principally from search and display advertising on Yahoo Properties and Affiliate sites, with the majority of our revenue coming from advertising on Yahoo Properties. Our margins on revenue from advertising on Yahoo Properties are higher than our margins on revenue from advertising on Affiliate sites as we pay TAC to our Affiliates. Additionally, we generate revenue from other sources including listings-based services, facilitating commercial transactions, royalties, and consumer and business fee-based services."

The REAL answer is "a tax efficient proxy for holding Alibaba shares".

This is the correct answer.

Matt Levine did quite a long writeup about this a while back: http://www.bloombergview.com/articles/2014-04-17/how-can-yah...

Taking an uncharitable view, Yahoo!'s core business actually has negative value -- and the current round of layoffs is a direct result of Wall Street pressure to stop subsidizing said core business and preserve the value of the Ali Baba stock.

Alibaba's market cap is $174B. Yahoo owns 24% of their stock. That's $41B of wealth right there. That's actually more than their own market cap, which is $28B!

I imagine the natural duopoly of tech is at work here. Google/Bing is pretty much it for web searching in the US, with no room for whatever engine Yahoo is borrowing this week. Gmail (gmail.com, google business apps, etc)/MS(Outlook/Hotmail, Azure, Exchange 365) for mail, etc. Not sure where Yahoo even fits anymore.

> Alibaba's market cap is $174B. Yahoo owns 24% of their stock. That's $41B of wealth right there.

That last trade price times number of outstanding shares -- market cap -- is the only common basis for overall valuation of publicly traded firms (that is, the only basis that is guaranteed, by definition, to be available for every publicly traded firms) does not mean it is a particularly accurate and meaningful measure of the overall value in any useful sense.

It does illustrate the point that Yahoo's wealth is really in its holdings. Yahoo as a company really doesn't produce much, or anything, of positive value.

In terms of actual money, that's not wrong. The core operations are at about break-even per the 2014 report:


... I didn't even know they had a real-estate site. This is their principal revenue source?

Sports. Depending on who you ask, they're the first[1] or second[2] most popular sports website in the world.

[1] http://www.ebizmba.com/articles/sports-websites

[2] http://www.alexa.com/topsites/category/Top/Sports

finance.yahoo.com is pretty decent, too. Based on ghostery blinken, they're not as pathological in their tracking as some other major sites.

Everyone uses Yahoo finance and watches yahoo stock go down, what irony.

Yahoo sports is good. Their fantasy sports are huge. Their finance is also probably the most visited.

They don't have a business, at least not one that can support the number of employees they have. Their business is actually worth negative dollars. The only thing that was keeping their value high was their Alibaba investment.

This is an off quoted, frequently misunderstood statement.

If you assume zero discount of the Alibaba stake due to taxes or other uncertainty, then Yahoo has zero or negative value.

However, there is >0% chance that the Alibaba stake will be taxed or that Yahoo leadership will sell and spend the money instead if returning it to the shareholders.

The more accurate statement is that the uncertainty a "core" business brings outweighs the value of said business. Part of that uncertainty is the tax treatment issue of BABA shares, the other part is a vote of (or lack of) confidence in Yahoo leadership.

Yahoo itself has plenty of value. Probably not 10B, but probably more than 1B.

If this was true you would be able to purchase Yahoo without AliBaba stocks for $1Billion. However if you walked in with a Billion dollar check and that offer, you will not get a meeting.

What's good for the shareholders and what's good for management are two separate things.

They keep calling themselves a "media company", but they've done such a terrible job at delivery (of media and vision) that it wouldn't surprise me if most people working there don't even know what the company is about.

Recently I tried watching Yahoo's Other Space (https://screen.yahoo.com/other-space/), but gave up after a few episodes - even though I enjoyed what I was able to watch. From what I could tell, the show wasn't available through the Yahoo Screen mobile app. (Which brings another question, WTF is the point of that app?!) The website lets you watch streaming video, but the site is impossible to use from mobile, and it would randomly crash every iOS browser I tried (Safari, Chrome, Firefox). When I tried watching from a desktop the video stream would occasionally freeze, and the Ads would randomly reset the stream back to the beginning of the episode.

I love the show Community. I watched like three episodes of the new season and stopped. The weekly release model is just dumb. They made it nearly impossible to watch via Chromecast as well. At some point I lost interest in getting past their obstacles and just stopped watching.

Yahoo reminds me of Apple in the mid 90's. Even good ideas are just terribly executed. They hired the wrong leader to try and fix their problems.

I watched the entire season of Community on Yahoo TV on my AppleTV. I never saw a single ad-either before/during/after the video, or in the app itself. They spent a ton of money to get Community and that awful Goop thing from Gwyneth Paltrow but there was no attempt to monetize it as far as I could see. Quite the head scratcher.

> This, IMHO, is the crucial point: what exactly is Yahoo's business?

Keeping the C-levels employed?

I've never paid much attention to Yahoo!. It might be that cheesy logo just made me discount their seriousness when they started. Like when the print Wired was first out, they had different text colors and fonts, sometimes in the same paragraph.

I think Yahoo's business has been to be the internet, but they never noticed that other companies and services took that all away from them piece by piece. Now they're just a stock.

The most valuable part of yahoo to me is groups.yahoo.com. It's works somewhat like USENET, but includes a group-specific files section. There are some groups with information which exists nowhere else.

It sucks that this is locked into yahoo, but I'm sure it was the most convenient option at the time.

They own tumblr, and a ton of alibaba shares.

And only one of those is valuable.

Well they get a lot of non-Asian revenue still so it comes from somewhere.

"Having no work is a leadership problem."

Oh man is that true, especially in the case of a supposed Internet ecosystem that's got issues with keeping properties up to date and coherent. Surely some of these properties have product managers that have not fallen asleep, and who are in tune with how to keep their products relevant, who have features they want to implement.

Being "overstaffed" in an environment full of poachers means your C-suite hasn't got a plan, or even remained connected with product management to make small-ball plans. They may find that renovating their slummy properties doesn't pay off. But this smells more like cleaning up the results of senior management lackadaisy than a purposeful trimming.

I'm not saying it's totally Mayer's fault, but there are numerous stories reported in the media in 2015 where high level execs were basically in limbo in late 2014/early 2015 where she was scurrying to come up with the broad product strategy. This caused so much animosity and frustration, leads opted to leave the company for other positions. So your anecdote doesn't surprise me at all. If leads felt disempowered to make decisions or if there is a lack of company vision, how could they distribute work to their teams?

I was in a startup where I basically sat without clear product to work on for a month, and I quit within a three months because it was a complete waste of my time and creative potential.

> where she was scurrying to come up with the broad product strategy.

You don't need a "broad product strategy" to do your job well. Unfortunately, many products coming out of Yahoo are shitty; and this should be fixed regardless of who's on top. Whatever you're working on, make sure it's first-class.

Just read this and weep: Jeff Bonforte, Yahoo's SVP for communications products, says: “I just try to ship products that I’m not ashamed of" Source: http://www.nytimes.com/2015/12/02/business/dealbook/yahoos-b...

How many people will go out of their way and search Twitter for clarifications? I read the quote, and rolled my eyes. The journalist should be ashamed to take such a quote out of context.

Once a Japanese executive said, "It doesn't matter if you fire bottom 20%. Eventually the existing employees will form the new bottom 20%".

Depends on the severence package. 6 months of salary when it doesn't take 6 months to find a new job isn't a bad deal.

Agreed. In general, I find there are two types of layoffs:

1. Layoffs where an entire industry is downsizing, and not everyone who was laid off will be able to find jobs in the same industry. I have immense sympathy for these folks - in many cases it is difficult if not impossible to get back to the same salary level.

2. Layoffs where one company couldn't make it, but the industry as a whole is extremely dynamic and growing by leaps and bounds. This is Yahoo's case. While it's always hard when "somebody moves your cheese", it shouldn't really be hard for those laid off to find new jobs. Plus, the writing was clearly on the wall for a long time, so it shouldn't be totally unexpected. As someone who has been in a similar situation, if anything I saw many people looking to be laid off because they would rather have a sizable severance than go down on a sinking ship.

Depends on what you do...it could take more than 6 months, and try being income-less in SV for a few months

In addition: Now the marketplace will be flooded with former Yahoo employees. Up until now I would claim < 6 months on average to find a job (Even in SV). Now... Not so sure.

It's a company founded in 1994. A bunch of technologies available today (code management, deployment tools, content management, internal tooling) were not available back in the days, on a bunch of other things (ad serving, support for mobile) the industry has moved forward, but Yahoo! hasn't.

So you're right, a bunch of inefficiencies exist by design, a bunch of them due to the company's age (and to Yahoo!'s credit, their contemporaries like HotBot or Lycos or Excite are gone completely) and need to build certain stuff in-house, and a bunch of it created internally to guarantee job security in some departments.

They've outsourced search and on the Web/media front are doing things that Wordpress.com is doing at much better scale with fewer people, so yeah, there's potential for improvement there.

What is Yahoo's business these days ? from my little understanding they look like a glider looking hard to find hot air pockets to sustain longer, but I don't understand what they do to get money.

~12-13% US search market share. That's a HUGE amount of traffic. Plus they have relatively dominant positions in a few oversea search markets.

And quite a lot of display advertising.

Oh well I underestimated that figure...

Yahoo still has a bunch of really smart people doing important open source contributions - I wish all of them all the best and I really hope that the tighter belt will allow them to continue their work.

In the past 10 years with Yahoo I - deleted Yahoo Weather after they put huge ads and briefly used Flickr.

In the past 10 years with Google I - use Gmail, Google Drive, Google docs, Google sheets, Search, Google Maps, Chrome, Waze and YouTube on a daily basis. I've also bought Chromecast and occasionally use Hangouts & Wallet. I'm excited about a lot of their Google X projects.

The 15% job cut is because Marissa Mayer failed to suck me and millions of others into the Yahoo ecosystem.

I think part of that is shifting Yahoo from a media company to something more like Google.

All the mentioned Google services are being paid for by Google Search, a luxury that Yahoo never had.

Why didn't they innovate more?

I really don't understand why she continues to hold the job - I haven't seen anything that she's done that has worked at either expanding revenue or at least stemming the bleeding. She also seems does not seem to be an effective manager given the turn over at the senior level.

My only hope wrt Yahoo is that Yahoo Finance gets sold to someone before the company implodes. It's basically the only top notch, useful site they run.

Yes, one of the few (only?) sources of real time quotes...not even my damn brokerage provides real time quotes for free.

The Yahoo Sports app is really good (and seems to be quite popular). Game times, vegas odds, scores, etc. for all sorts of different US and international sports. I'm hoping they continue supporting it.

Why is that? I haven't visited it in years and use Google Finance instead.

Because Google Finance is obviously abandonware, and Yahoo Finance has a great iOS (and I assume Android) mobile app.

Article primarily references information from the WSJ article, but WSJ now has a super-paywall and the "web" trick no longer works.

The same text as the WSJ article is reprinted here: http://news.morningstar.com/all/dow-jones/us-markets/2016020...

Maybe it just changed, but there is an article and not a link to the WSJ. You can also use this to read the WSJ article:


Nope. They closed that workaround.

The article was indeed changed; edited OP.

Interesting, it still works for me but I have an extension that automatically sends a Google referrer to all WSJ.com request. Not sure why that would behave differently, but it does.

I noticed this a few days ago, the came from google trick no longer works. Anyone have a workaround for this?

The "came from google" trick is still working for me when I use a private window in Google Chrome on OS X. Both versions latest available.

I believe you have to delete all your WSJ cookies, then load from Google.

edit: hmm guess not. is this allowed by google?

Is Google slapping them accordingly?

Try search from Google, then open resulting link in a private / incognito window.

Are you on mobile?

This also happens in the desktop.

At the dawn of the Internet Yahoo held the Internet's home page, there were so few sites and Search Engines were so primitive that I remember using Yahoo Directory to find websites and for many years `ping yahoo.com` was my magic command to tell whether my modem had an Internet connection. My first Internet account and online alias was at Yahoo, I used mail and their personalized home page every day...

But then started their decades long decay, whilst the Internet boomed the Yahoo directory became old and static, I moved to searching on Google pretty quickly and jumped when gmail was released with it's unprecedented 1GB of free space. Around the same time my Yahoo mail became my junk account, my personalized Yahoo home page started bit rotting, my Internet connectivity command became `ping google.com` and I never went back to searching on Yahoo. They also jacked up prices of Yahoo domains by 300-400%, violating existing customers trust and prompted me to go shopping for a new service provider pretty quickly.

Although I've been disconnected from all things Yahoo, I imagine it's been operating in its own niche corner of the Internet, I'm told Yahoo mail has hundreds of million users (my Junk account likely counted), I'd be interested in the number of active accounts and their demographics, my guess goes to an aging population. It's now been years since I heard anything positive coming out of Yahoo, they've hit the news with MS's failed acquisition, switching search engines and CEO churn - but otherwise I can't recall anything new coming from Yahoo that wasn't M&A.

They seem like a draconian company holding onto legacy labor-intensive degrading assets which happens to be sitting on a gold mine with their Alibaba investment. I don't see how the current structure is capable of re-inventing itself so stream-lining their existing operations and trimming off dead-weight and losses seems like the only way forward. If they ever have a chance to becoming a tech force again they need new blood and talent pretty quickly. Fortunately they have the resources to make something but I only see it coming from outside of Yahoo, if I was them I would look at using their resources funding young, talented and innovative startups that aligns with their growth and business interests, e.g. they could mandate all ad-supported startups must use Yahoo Ads. Even with all the Talent Google has, many of their most valuable assets like Android and YouTube came from acquisitions. With Yahoo's brain drain I suspect that's going to be the only way we're going to see a resurgence from them.

> `ping yahoo.com`

Haha, I still do this out of habit too.

Me too. Literally the only thing I've used Yahoo for in years.

What about Tumblr ? Is that thing still on? was it worth the bazillion dollars they spent on the aquisition.

Also a long time ago, Yahoo made Mark Cuban a billionaire. What happened to the technology they acquired from his company?

Haha are you kidding? This game isn't about doing useful things or creating useful, long-lived products. This game is about worshipping people like Mark Cuban and Sam Altman who put a lot of money in their pockets while doing nothing of value. I mean seriously have you used Bebo lately? Do you know how much money the founders of Bebo punched out with?

Tumblr remains a top 50 US site, so yeah it's still on.

Was it worth it? I don't see any meaningful competitors to them. Nobody has come along to knock them off. The $1.1 billion price was obviously steep for a blog service. So long as the traffic remains, they have some shot at turning it into a sustainable business. It's realistically worth 10% to 20% of what they paid for it though.

Tumblr has a problem of demographics which makes it difficult for Yahoo to make money off of it. A very large segment of their users are teenagers, and another large segment do little other than post pornography.

Teenagers do spend money. Loads of it.

Teens are great to market to because they can get money out of their parents.

Much easier to get money out of people who can get money from themselves.

Ad impressions from adults are worth more than ad impressions from teenagers.

Notoriously bad deal(great for Mr Cuban though). Yahoo paid something along the lines of $10k per user of broadcast.com

I do not work there, but have applied to try to be on their development team. They seem to be ramping up their workforce, trying to find a way to make some more money off the product as a whole. Pretty similar to other social media sites it seems.

Broadcast.com is literally a redirect to Yahoo.com -- there's not even a notice telling former users that it was shut down.

At this point, I feel bad for the other 85% who still work there...

> Ms. Mayer is expected to announce greater focus on Project Index, an internal project to build a better search engine tailored to mobile phones, said a person familiar with the matter. The company has posted listings for at least 190 jobs on its website this month, the vast majority of which are for engineers.

1. I am eager to find out why it is tailored to mobile phone and what capacity the engine would give to a mobile phone. A search engine should work on both desktop and on the go.

2. Did job research with Yahoo a couple years ago, so I am not sure how much it is true today and whether my observation is correct or not from their hiring standpoint. But I know in the past, half of the Yahoo hiring post dates were at least 6-12 months ago, which indicated either the company was struggling to find and acquire talents, or someone simply never bothered to cancel the request and the team responsible for managing the hiring posts never bothered to check with the requester regularly. Either way, it was bad for a job seeker to see a company fail to remove job posting from months ago.

IMO, if you are still hiring the same title for multiple job filling, submit a new one and put a new date.

There are still plenty of sites that are unusable on a mobile phone, so that's one consideration.

Did you mean going over to another site? Because major search engines like google, yahoo and bing have their own app for major mobile OSes. Unless you want to render other sites within your app, that's a whole different story. I am under the impression they want to incorporate Yahoo News Digest (pretty much an update from the expensive Summly acquisition) into the search experience.

I guess he meant that search results that don't render well/fast on mobile could be demoted.

I guess this proves that banning work-from-home didn't solve their problems.

Yahoo was the internet destination back in the 90s and into the 2000s until Google started to eat their lunch in search and email.

In my opinion, Yahoo's strength was its diversity; it was a one-stop shop for everything internet. You could register domain names, set up web pages, sell items, conduct email, instant messaging, etc. all within the yahoo.com domain. Gradually, it seems that other, nimbler competitors have gradually chipped away at Yahoo's lead until it seems they don't do anything particularly well compared to the competition. Too bad.

They still do have 400 million email users, and email users are loathe to change, so that business is probably safe for a while. But with nothing new to offer, and many good offerings sinking or gone, Yahoo is becoming a low price acquisition target. Sad to watch; at one time it was the iconic Internet business, in the Fortune 500, that could seemingly do nothing wrong.

> I guess this proves that banning work-from-home didn't solve their problems.

I always considered that move to be simply Mayer forcing some attrition without having it declared a layoff.

> I guess this proves that banning work-from-home didn't solve their problems.

I don't know what's the big deal about that. It affected ~200 people max. Yahoo was just tightening the restrictions, bringing them in line with the rest of the Valley companies. And yet people still think that it was a big deal; it wasn't.

(Source: I was there.)

Maybe it wasn't a big deal for you but it was perceived negatively overall and it hurt Yahoo's reputation (or whatever remnants of that remained at that point in time). If only 200 people were affected then it wasn't worth the backlash it created and wasn't a smart move. Anyone who was impacted by it, e.g. wasn't able to go pick up his kids or stay home for a plumber to come fix his sink, wouldn't be happy and his unhappiness would impact people working with him. These sort of moves can hurt the "spirit" of a company irrevocably.

The reason was to get rid of dead weight that was "working from home", but effectively just lifting a paycheck for doing nothing.

It did in no way impact productive employees who needed an occasional flexible schedule.

But that's not something you can tell the press, so it was spun as it was spun, and that's what people remember.

In actuality it just tightened the existing restrictions on remote workers to the very upper echelon of ICs. It didn't really impact occasional work-from-home people much as long as they flew under the radar, but it did impact the sort of people who lived in the middle of Idaho. Everyone was required to relocate to within 100 miles of a Yahoo office and commute in most days, unless they were truly irreplaceable and their VP went to bat. Oh and imagine relocating to be near an office that was subsequently closed.

It was a stupid policy decision, it damaged the Yahoo's public reputation due to their incompetent PR (nothing new there) and it has cost Yahoo a considerable number of excellent (but not truly irreplaceable) employees.

In conjunction with the drive to re-centralize teams back in Sunnyvale (after other drives to de-centralize to less competitive markets to hire better people), this cost Yahoo a lot of their network engineering team, among other groups. LinkedIn, Apple, and other companies have reaped the benefits of Yahoo's short-sightedness.

Whenever a company has to resort to cleaning house to rid itself of dead weight -- either by "banning" remote workers, mass layoffs, or whatever else -- the real story is that they simply don't know who is doing good work and who is not. If they knew, that, then the non-workers would already have been separated from the company.

Either the managers are not suited for their roles or not empowered to perform the duties of their roles or terrified of political nonsense like losing headcount and reqs and being demoted. Yahoo has consistently failed to properly measure employee performance, either taking a lackadaisical approach to performance or using pseudo-scientific nonsense like bell curves. As a result, there has always been a lot of dead weight -- inside the offices is no exception. They're currently being sued for their firing practices, and the suit suggests that the performance measuring system is wielded punitively for political purposes. I don't find this at all hard to believe.

There is no easy fix to a poor work culture, and I don't think Yahoo really has ever had the stomach for the hard fixes. The culture is too poisonous and it has persisted too long. It doesn't matter now though, Yahoo won't be around in its current form for too much longer.

>Yahoo's strength was its diversity; it was a one-stop shop for everything internet.

I consider that its greatest weakness.

It didn't do any of these things particularly well. So focused competitors (Google, GoDaddy, eBay/Amazon, Skype/AIM, etc.) eventually took over and dominated. Yahoo never really retaliated by making their services any better. In fact, I can't even think about any major overhauls to any of Yahoo's various products. They've come out with a few nifty things (none of which I can even remember by name) and that's all I can remember about them since 2003-2004. In 2012 I was surprised to hear they were still in business, to be quite honest.

> They still do have 400 million email users, and email users are loathe to change, so that business is probably safe for a while.

I'm one of them, and Yahoo makes precisely zero dollars from me -- they've been a free IMAP server for almost 20 years. It will be a huge PITA when they die and I have to tell a bunch of people to update their address books. I wish there were a way for me to pay them a few bucks to host my mail, because other options like running my own mail server and "sharing" everything I say with Google are not so good.

You could pay them $50 a year for your e-mail: https://help.yahoo.com/kb/SLN15967.html

Doesn't seem worth it to me, but it isn't that expensive in the grand scheme of things. If it makes you feel better about paying them, at least circa 2012, only users on paid mail farms had their mail data backed up. Everyone else's mail was not ever backed up (although each farm has a dedicated Netapp Filer which provides operational redundancy).

Or you could pay us $40/year for your email: https://www.fastmail.com/signup/personal.html and be buying from a team which is just focused on email.

(and yes, we back up everyone's email)

Agreed. I wish e-mail (and many other services) wasn't a "free" offering from diversified players. I think pure play businesses who gasp charge enough to make a living and a profit based solely on their product's direct value are very appealing.

Thanks for the link. $50/yr is overpriced for IMAP hosting, but it's good to know that they at least offer the service.

The maddening thing is that they used to offer Mail Plus for $20/yr, and it was eliminated in favor of providing those features to all users (good idea). So this new paid plan is much more expensive and offers much less value.

It also seems kind of hard to believe that Yahoo makes $50/yr off of ads per user. They certainly are not pulling that in across the hundreds of millions of mail accounts they claim to have. Since Yahoo is getting the money up front and without the work and risk of selling ads, I would actually expect it to be priced at a discount versus what Yahoo would see from ad revenue.

Maybe they should spin off every area they operate in, into a separate company? Like Sports, Finance, Mail, etc.?

CEO Training 101

Multiple rounds of layoffs destroy company morale. Better to do one big one, and then hire back if necessary.

Don't go after workers just because they're highly paid, and force them to pick between paycut or package.

This is how you lose all the good people.

There is a movie dialogue where a man from the future tells his friend in the past:"I want you to remember this word, okay? It's kind of like a code word: Yahoo. Can you remember that?" It ends up making his friend rich in the future. The movie is Frequency(2000)

If you are one of the 15% who were let go, ping me at christian@smarthires.io and I'll personally try to help you find a new job. We are working with many companies from YC and other VCs!

As a post mortem of sorts, could someone with an understanding of yahoo from the inside explain why they have failed to innovate for 10+ years?

I don't think it's just about innovation. They were one of the first big companies to figure out how to make money selling ads on the Internet, though many of their best paying customers were actually failed dot-coms. It was still enough to get them through that first round okay.

The main thing they've lost out on is not having something that competes with Google on ads. Especially the part where Google's entire ad buy market is automated while Yahoo's isn't. Their management made a big bet that just giving out media and other cools stuff for free to users would bring in enough eyeballs to make things profitable. That worked for awhile, but the switch to mobile and a large number of other competitors on the Internet ad front has hurt both income and market share.

I don't work at Yahoo but I believe the answer is management.

How so? As in they just never hired the best people/created processes that resulted in innovation?

Hiring is part of it but it's also about systematically launching products to create your own ecosystem.

Yahoo's never really built an ecosystem like Google and when you couple that with low performing acquisitions you get job cuts.

> Yahoo had about 11,000 employees as of June 30

That's still a pretty big company in tech terms. A bit less than Facebook.

A lot less than Facebook at this point. There's no longer a good comparison to be made there, as Facebook's business is five times larger.

Their Q315 was just about larger than all of Yahoo, and Facebook's sales are growing at 50%.

Facebook earned $1.56 billion in net income last quarter (and they'll do $5+ billion annually going forward). Yahoo is struggling to stay near $50-$100 million per quarter. And that's net income, skewed by various b.s., Yahoo is producing lots of red ink on operating income (FB has ~30% operating income margins).

Facebook is going to hit near $22-$24+ billion in sales over the coming four quarters. Yahoo is stuck around $4.6 billion.

Facebook is a cash generating machine, while Yahoo is becoming AOL: trying to extract dwindling amounts of cash from legacy businesses.

It's a really bad contrast these days.

"12,691 employees as of December 31, 2015" --> http://newsroom.fb.com/company-info/

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