Yahoo begins CEO search
— -- Wanted: a dynamic, enthusiastic leader for one of the Internet's most used properties, who can wow Wall Street and company employees again. Must be a specialist in quick turnarounds, and able to tout instant results.
That could be the help wanted ad for Yahoo, whose co-founder and CEO, Jerry Yang, said he would resign Monday.
His pending exit started an online guessing game on blogs of short-listers for the job. Names widely circulated online include former AOL CEO Jonathan Miller, and Dan Rosensweig, an ex-executive vice president of Yahoo.
Both declined comment. Yahoo says it has hired executive search firm Heidrick & Struggles to look for both internal and external candidates.
"The appointment will tell a lot about what the board wants to do," says Gene Munster, an analyst with Piper Jaffray. "Do they want an outsider or insider? If they don't land a big name, it's probably a sign they're more open to selling the company."
Microsoft made an unsolicited bid for Yahoo in February, at $33 a share, but the deal fell apart when Yang said Yahoo was worth more.
Yahoo stock closed Tuesday at $11.55 a share. Yang never recovered on Wall Street for letting the deal slip away, says Munster.
The analyst believes Microsoft and Yahoo will come to terms within the next 10 months, now that Yang is leaving.
However, analyst Allen Weiner from Gartner believes a union is years away. Yahoo needs to recover first, instead of being sold at a fire sale price.
"The next CEO should be a young turk, a second or third in command who's learned the lessons of a successful company," he says.
Weiner mentions Jason Kilar, CEO of online video service Hulu, as a perfect example of the type of person Yahoo should seek out. Kilar worked at Amazon for a decade, and brought his experience to the NBC Universal and News Corp. owned venture.
"Yahoo is still a powerful force online," he adds. "What they're missing is a vision and leadership for the future."
Also missing: growth.
Citibank analyst Mark Mahaney says Yahoo's cash flow has been flat for the last 2 years, and will likely remain that way through 2010.
"Under the right management team, given Yahoo's global distribution, growth can come again," Mahaney says. "Yahoo needs to fire up the employees, not just fire them, and bring in new tech talent to get to the next level."
Despite Yahoo's well-publicized Wall Street woes, the service continues to attract one of the largest audiences online.
In October Yahoo attracted 141.9 million visitors, number two to Google's 144.2 million, according to market tracker comScore Media Metrix.
"Yahoo's audience base is loyal," says Forrester Research analyst David Card. "Yahoo is as good at it as anybody is. It just needs to double down and figure out where the future is. The new CEO needs to come in and make quick, tough decisions, inspire the troops and wait out the downturn."