Why did Yahoo's Gary Gale Twitter about a Wi-Fi network labeled "Valleywag" at Yahoo's quarterly all-hands meeting? If I worked for the New York Times, I'd give you all some blah-blah-blah about how we don't discuss our reporting methods. But I run a gossip rag, so I'll just play coy. We did gather that Yahoo CFO Blake Jorgensen was asked about the company's pending layoffs of 10 percent of the workforce.Yahoos at the meeting were told that the job cuts would come after Thanksgiving. And the severance? Jorgensen said the company would "do right by Yahoos" — and referred to the legally mandated notice period required by the WARN Act. Translation: Yahoos will get 60 days' severance, because it's the law. Oh, and there's no point in cancelling the holiday parties, because they've already been paid for. After the all-hands, Gale and other Yahoo employees proceeded to an Oktoberfest party.
The latest rumor on Yahoo's upcoming cuts: As many as 1,750 jobs lost. But far worse than the number are Yahoo CFO Blake Jorgensen's plans for the departed. A tipster says Jorgensen is pushing for zero severance pay beyond what's legally required in a mass layoff. Compare that to eBay, which sprang for five months in its latest round of cuts. "Corporate politics — such a dirty game and the average Joe gets the shaft," our tipster writes. "Financially, I don't understand this because the market is going to shit and the Street would be forgiving if Yahoo decided to give the rank and file up to six months or so. Not to mention the people at Yahoo right now stuck with management through all the turmoil, although maybe that makes them too stupid to deserve severance in excess of unemployment checks. However once the political motives come into play it makes much more sense." Political motives?Zero severance would certainly evaporate any remaining support CEO Jerry Yang has within the company. But our tipster says Sue Decker, a close friend of Jorgensen's who hired him into the company, opposes his severance plans. So what's Jorgensen's game?
Any Yahoo can tell you that working at the troubled Web giant doesn't pay. But for former CEO Terry Semel, it really didn't. Last year, he made negative $6.2 million, Docu-Drama notes. The accounting oddity, uncovered in an SEC filing, has to do with stock awards he forfeited when he left the company last year. Don't weep for Semel: He still owns half a billion dollars in Yahoo stock, and has sold plenty, too. What shareholders may find more upsetting are the left-and-right raises Yahoo's board handed out to top Yahoo execs in 2007, a year whose horrible performance set up Yahoo for Microsoft's hostile bid. Here are the lowlights:
What's Yahoo CFO Blake Jorgensen so happy about? Try Yahoo's first quarter earnings on for size. Widely expected to surpass Wall Street expectations, Yahoo did not disappoint, reporting $1.35 billion in first quarter revenues after traffic acquisition costs, a 14 percent percent increase over the first quarter 2007. Still, Microsoft CEO Steve Ballmer said earlier today that positive earnings would not cause him to raise Microsoft's $31 per share offer for Yahoo. Yahoo CEO Jerry Yang, president Sue Decker and Jorgensen respond in our live coverage of Yahoo's analyst conference call, below.
Yahoo reports first-quarter earnings later today. Everyone agrees CEO Jerry Yang has to report better-than-expected numbers if Yahoo hopes to continue fighting for its independence from Microsoft. So guess what? Yahoo is going to report better-than-expected numbers. "In any Internet business, you can pull the stops out in any one or two quarters," Jeffrey Lindsay, an Internet analyst at Sanford C. Bernstein, told the WSJ. "They'd be very crazy not to." If he's getting pressure from Yang, here are three ways for CFO Blake Jorgensen could cook the books for today's report and keep his sanity:
Let Google and Facebook play ultimate frisbee. Yahoos like balls, and they like them in the face. Their game is called Faceball. How it works: Two players sit in chairs ten feet apart and take turns throwing inflated beach balls at each other's faces. One point per facial, and no ducking. This goes on for five rounds. John Allspaw and Dunstan Orchard developed Faceball in April 2007 and ever since, Yahoos — from CEO Jerry Yang on down — have loved it. When it came time to plan the launch of Flickr Video, there was little debate as to what to do. A Faceball tournament was held on April 9, 2008. In the picture above is your winner, cofounder David Filo. Below, a video (on Vimeo, not Flickr, oddly) from Faceball creators Allspaw and Orchard describing their game, as well as more photos (on Flickr) from the tournament.
After Valleywag reported that Yahoo would shut off its shuttle bus service Yahoo CFO Blake Jorgensen allegedly told employees "Don't believe everything you read in Valleywag, but yes, we are cutting off the shuttles." Hiring managers have since told new recruits the buses are here to stay. In an April Fools' stunt, Jorgensen outlined a new plan for getting Yahoos to work. Check out the clip: It's something to do with Google and "locking arms with colleagues to appear larger to oncoming traffic." If only Jorgensen were as creative in coming up plans to win over Wall Street.
Why do corporations and executives participate in April Fools' pranks? To make them seem human, for at least one day. Here's the suddenly likable Yahoo CFO Blake Jorgensen showing how well that can work. Fresh from laying off hundreds of their colleagues, he announces to employees that this morning Yahoo made an unsolicited takeover bid for a gossip website. After the jump, the internal announcement posted on Yahoo's Backyard intranet, leaked like just about every other memo posted there:
Yahoo CFO Blake Jorgensen will not be speaking at the Thomas Weisel Partners investor conference today in San Francisco. Embarrassing for both, since Jorgensen is a cofounder of the tech investment bank. Go ahead, show up to hear Jorgensen speak anyway. You can't believe everything you read on Valleywag.
How low has the credibility of Yahoo's management sunk? Here's a tale that recently reached our ears: An employee reportedly asked CFO Blake Jorgensen at a recent meeting about the rumor that Yahoo would soon ax its shuttle buses. "Don't believe everything you read in Valleywag," Jorgensen is said to have replied. "But yes, we are cutting off the shuttles." This from the same crew that didn't anticipate Microsoft's unsolicited bid.
This morning, Microsoft CEO Steve Ballmer made the usual polite noises about "integrating" Yahoo's management into Microsoft. The reality? Come on. They're all fired, except for the geeks. If Microsoft had any respect for current management, they would have negotiated a friendly deal instead of launching a takeover. Most of the executive suite will be gone, I bet, within six months if the takeover succeeds. Here are the details on who's in and who's out, starting at the top.
We hear that Mark Rubash, left, a Yahoo finance executive hired by Yahoo president Sue Decker in February, is already leaving the company. Rubash, a favorite of Decker, was apparently the loser in a turf war with fellow finance executive Rachel Glaser, pictured here to his right.. We can't help but wonder if Glaser, a commuter from Los Angeles who's widely disliked on the Sunnyvale campus, will last much longer, as Yahoo undergoes a top-to-bottom reorganization. "She has no financial acumen," whispers one tipster — a fact that, if true, can't be lost on Decker and her recently hired ally, CFO Blake Jorgensen. Update: Rubash says he was offered a job over Glaser's head, but turned it down.