Some of the staff came from acquisitions, but it’s *extremely* difficult to manage that degree of growth. You need experienced adults with battle scars who can make decisions, insist on clear lines of authority, and balance between the participatory democracy of a startup and the hierarchical decisionmaking of a large company.

Yahoo had none of those. And as Helen notes, it made bizarre personnel decisions. My boss fired me (first time in my life) and left 3 days later to run the direct competition; you might think HR would have considered that an issue. Nope.

Another flaw, highlighted by the notorious “peanut butter memo”: Chronic under-resourcing. A mentor explained to me, “When you’ve got 40% annual profit growth from now through infinity baked into the stock price, of course there are never enough resources.”

It takes time, smart thinkers, and good coders to build products. Yet the one budgeting process I sat through tossed our built-from-the-ground-up revenue & cost projections out the window for growth almost twice as high, with the dictum, “Make it work.”

Will Microsoft be able to fix any of this?

Hahahahahahahahahahahahahahahaha!

I also know people working for Google, and the conclusion after many a beer is: At Yahoo it’s incredibly difficult to push a project through (but if you succeed it will reach the end user). At Google it’s fantastically easy to push a project forward and make the pilot (but you then have to get through Sergey and Larry to get in online, so maybe just 1 out of 500 projects will ever make it to the end user).

I don’t know what is more frustrating…

Anyway: My take on Yahoo: Split it up so that each product sits within an independent company with full responsibility (and bonuses) for earnings. Then keep a lean holding company (much as IAC?) to encourage and point to win-win cooperation deals between the companies.

I really cannot see them being run by MS….

But what was the canary in a coal mine for me, was their blatant disregard for talented, creative, productive people. It seemed like some incredible executives were getting canned …for bizarre reasons.

An environment of fear, lack of risk-taking as you so ably write, decision by committee and the easy discharge of great and loyal talent has diminished Yahoo. Ah, the big corporate dilemna.

Much better to focus on the interesting, new companies.