Yahoo chief in a tough spot
SAN JOSE, Calif. — When Yahoo co-founder Jerry Yang took over the reins of his troubled company last year, the blog posts and e-mails came with attachments of hope.
“Rock on!”
“I know you’ll do a great job.”
“Break a leg.”
Hollywood mogul Terry Semel was out. The company’s co-founder and mild-mannered geek was in.
But even as the company cafeteria in Sunnyvale buzzed with optimism that Yang would bring back the mojo of Yahoo’s early days, there were hints of a dark shadow from Seattle.
“Now,” one prophetic blogger asked Yang, “when are you going to sell it to Microsoft?”
The deadline for Microsoft’s hostile takeover bid passed a week ago without a peep from either company. But the Taipei-born, San Jose-raised engineer who gave both sides of his brain for Yahoo may be unable to protect it from Microsoft’s claws. Some suggest the same nerdy personality that revolutionized the Internet and turned geeks into gods is no match for the treacherous business that online search has become.
“He’s one of the icons of the valley,” said tech analyst Rob Enderle. “But his strength was never running companies.”
For the cubicle corps of loyalists that Yang made rich and who still boast of their place in the date-of-hire pecking order, their “Chief Yahoo” is still the best bet in a bad situation. Like many of his faithful who have circled around their CEO, Yang declined to comment for this story. Yahoo executive vice president Hilary Schneider said her boss remains as passionate as ever, still focused on helping consumers “live life with an exclamation point.”
Still, for the man who put the “!” in Yahoo!, life has become a big “?”
“I can’t imagine Yahoo without him,” says David Kenny of Digitas, who has worked with Yang since Yahoo’s earliest days. Added Ellen Siminoff, another former employee: “It’s his baby.”
Over Yahoo’s 14 years, Yang has prevailed through the dot-com bust, delivered an emotional layoff announcement in the company cafeteria, and made amends after facing a congressional panel blasting him for handing over a dissident’s IP address to the Chinese government.
Yang is worth an estimated $2.3 billion and is expecting his second child. He’s just 39, but in Silicon Valley years, this wunderkind is verging on senior citizenship. Whether he’ll stay with a merged Micro-hoo, start the Next Big Thing, or become a gentleman philanthropist, retiring to his golf game and growing family, is anyone’s guess.
Yang and fellow electrical engineering buddy David Filo created their first Web directory, “Jerry and David’s Guide to the World Wide Web,” at Stanford. They moved from the lab to a cluttered trailer on the Stanford campus, then into a shared space in Mountain View, Calif., in 1995.
Derek Dukes, a Santa Clara University student when he met the pair painting that new office a lavender hue one night, remembers them as “just two guys who put their Ph.D. plans on hold to pursue this thing that started as a hobby and became a full-time obsession.”
The sleeping bags came out. And the take-out meals came in.
“We honestly all believed we were making something that mattered,” said Dukes, 34, who became hire No. 6. Yahoo “was either going to change the world, or AOL would buy it in three months.”
When Yahoo went public in 1996, Yang became an instant millionaire. But wealth seemed not to change him. He once flew to New York for a Vanity Fair photo shoot, hopping a red-eye to save money. He still had Sunday dinner at his mom’s, and when an employee asked him and Filo to meet her parents for brunch, he blocked off a whole morning.
“He was very humble,” said former colleague Jim Brock. “The first day I joined Yahoo, he said, ‘Never forget the engineers. They are the kings and queens of the company.’ “
Yahoo’s quirky workplace culture mirrored Yang’s own playful life view. “On one hand, he had that super-nerd image with the thick glasses,” said a former employee, “but he also had this country club aspect to him. He’d wear the nice $80 golf shirts around the office and was always tan from being on the links.”
“I don’t manage anybody,” Yang once said. “It’s very informal, very open. Everyone has cubicles, nobody has offices.”
As his company rode the dot-com roller coaster, Yang remained what one associate called “Yahoo to the core.” When Yang could have taken the money and run, “he stayed, worked really hard, and continued to drive things.”
Dukes says Yang deserves more credit. Running Yahoo in recent years, he says, is “like steering the Titanic. Would I have liked to see him take some bigger action? Yeah, I can totally armchair quarterback that. But I feel that there’s stuff in the works that’s taking him a little longer than he thought it would.”
So if his company is acquired, where does the San Jose boy who really did change the world go from here?
Analyst Enderle is blunt. “Yang is done. Nobody will bring him in at this level again. It’s epic, and it’s unfortunate.”