Yang's Fatal Instincts

We suppose it was just a matter of time once the Google deal died. According to the New York Times, the resignation of Jerry Yang as chief executive officer of Yahoo has been in the works for quite some time. Then again, the decision was also reportedly "mutual" on the part of Yang and the board of directors, a claim we find at least a little suspect. Now that Yang has surrendered executive control and become just another board member, the company's stock has shot as high as 17 percent. As Henry Blodget notes, if Yahoo's shares were to close at $12 today, that would mean Jerry Yang's departure would be worth around $2 billion to the company. If Yang still thought Wall Street wanted him around, he just got his answer.

There will be plenty of obituaries in the days to come. Most will point out the highlights. Yang lethally mishandled the Microsoft buyout offer, rejecting its bid of $33 a share, only to come crawling back when the company sank to $13 a share. He rolled the dice with a multibillion-dollar Google ad deal, risking the wrath of the Justice Department and a revolt among just about every major advertiser in the world. And he lost. In fact, the deal was always implicitly demeaning to his own company, a tacit admission that Yahoo can no longer compete in the search business. Nothing may have damaged his brand worse than that.

But for instapunditry, we'll take today's offering by Valleywag's Owen Thomas. Yang's problem, he argues, was simply that he embodied Silicon Valley's professed disdain for the gruesome details of running a business. He was always too busy chasing big ideas and coding, leaving the ins and outs of building a company to someone else. When it came time for him to run his own ship, his inexperience cost his company billions of dollars in a matter of months.

"Yang gave up way too early, hiring a professional CEO when the company only had five employees," Thomas writes. "A graduate-school dropout, Yang had no management experience, and no predilection for the task. He is still, to this day, famously indecisive and fatally nice."

There's coming up with a neat idea and then there's building a company around it. Yang outsourced the second task, never learning the skills it takes to survive in a complex world. Here's hoping life on the board is more pleasant than answering to it.