Since Jerry resigned as Yahoo CEO, the dark cloud that circled over Yahoo’s stock value and brand doesn’t seem lift.   In reality, Yang was a symptom of the underlying problems that lay in Yahoo’s top level management: lack of focus and poor execution.

Yahoo stock didn’t soar after Yang’s resignation.  Even before Yang took charge as CEO the value of Yahoo’s stock had been in decline from its post dot bomb high point of $43.00 in January 2006.  Navigating a failed acquisition attempt and white knight takeover, Yang managed to drive the stock price down to nearly $12.00 in late October.  Upon his resignation as CEO in mid November, Yahoo’s stock value shot up by a few points, but didn’t achieve the dramatic increase expected by most analysts. After a few weeks it slumped back its October average and followed the same holding pattern from other S&P 500 stocks.

Had Microsoft completed the take over, it would have effectively bought tremendous volumes of traffic via web properties in need of a serious overhaul.  Rather than optimizing the usability of the Yahoo portal page and focusing on several key high value products, like Yahoo Finance and Mail, Yahoo’s management focused on selling them off as quickly as possible.  Leaving another company to figure out what one’s brand, only after the sale, isn’t the best strategy for long term value, especially for stock holders.  Had Yahoo’s management team focused on this basic issue at its high point in January 2006, the value of their web properties would most likely be much higher. Like any online media business the equation is simple: ↑web property value = ↑ traffic volume + ↑ returning users +consistency in the product/service offering.

Probably the most serious issue is that Yahoo’s corporate culture needs an upgrade from start-up mode.  Maybe it was shear ambition that brought Yang back to the driver’s seat.  However, like most successful founders, Yang excels in the starting not in the building of a company. It takes a serious CEO to turn $7B company into $10B one, and Yang wasn’t that man.  Maybe not even Icahn is. The fact that he was appointed and positioned to take on this overwhelming and extremely challenging role, is indicative of management culture struggling to move on from startup mode.

Yahoo is a highly successful web companies, an amazing startup story, and the driving force behind a balanced and competitive online economy.  What Yahoo needs to do, is step up in terms of raising its stock value and keeping search and online advertising balanced against Google.  This can only be achieved by directly addressing the future of Yahoo’s brand, products and corporate culture, and only then placing a serious leader who can restore confidence to investors and execute effectively.  Let’s hope that Bartz is the right choice this time around.