♦ Attorney General Andrew Cuomo says Citigroup should follow Goldman's lead and forgo bonuses for senior execs. [NYP]
♦ Embattled Yahoo! CEO Jerry Yang has announced he will step down as soon as the board finds a replacement. [NYT, WSJ]
♦ Mark Cuban's attorney on the insider trading charges leveled against his client: "The case has no merit, and is a product of gross abuse of prosecutorial discretion." [WSJ]
♦ Treasury Secretary Hank Paulson is unlikely to use the rest of the $700 billion bailout fund on any new initiatives, preferring to hand over the remaining pennies—and very big problems—to his successor in the Obama administration. [WSJ]
♦ Andrew Ross Sorkin on extending the bailout to GM: "Taxpayers shouldn't fork over a cent, at least until shareholders are wiped out, management is tossed out and the industry is completely reorganized." [NYT]
♦ Attorney General Andrew Cuomo says Citigroup should follow Goldman's lead and forgo bonuses for senior execs. [NYP]
In an attempt to boost morale at Yahoo, signs showing CEO Jerry Yang with cofounder David Filo went up around the Web giant's Sunnyvale campus recently. They had no measurable effect. News of Yang's resignation, pending a replacement, might do more to cheer up the troops. The signs have proved easily edited to accommodate the news. (Photo by docwho76)
Why is Yahoo looking for a new CEO? Because founder Jerry Yang, in his year and a half on the job, has proven himself incapable of meeting the company's many challenges. Here are five key moments where Yang failed to rise to the occasion:1. The all-too-sacred cows. When he first became CEO in July 2007, Yang promised that there would be "no sacred cows" and a 100-day action plan. Instead, his efforts became mired in Yahoo's famous bureaucracy; the cows were spared. While the company had layoffs last February, they were not nearly enough; next month, Yahoo is cutting another 1,500 employees. 2. The Microsoft deal. In retrospect, Yang should have taken the $45 billion offer Steve Ballmer made in January and run. With the stock trading below $11, the company is now worth a third what Microsoft would have paid. 3. The Google deal. Google and Yahoo had struck a tentative deal to have Google sell ads on some of Yahoo's search pages; because Google is more effective at selling such ads, the deal would have added an estimated $800 million a year to Yahoo's bottom line. But Microsoft executives, enraged at being spurned by Yahoo, made so much trouble for Google and Yahoo in Washington, D.C., that Google CEO Eric Schmidt chose to walk away rather than accept a deal that would set a precedent for regulating Google's monopoly on search advertising. 4. The Carl Icahn insult. Corporate raider Carl Icahn pressed hard to get Yahoo back to the negotiating table with Microsoft, then tried to unseat Yahoo's board. Yang and the board retaliated with a campaign on Yahoo's homepage which suggested Icahn was clueless about technology. Days after the diss on Yahoo.com, Yahoo's directors relented and nominated Icahn to a board seat. While he's been mostly quiet, Yang's unplanned exit is a sign that he has not forgotten the slight. 5. Jerry Yang. Since becoming CEO, Yang has been pressed for an answer on the most basic of questions: Why should he be the one to run Yahoo? His answers have boiled down to this: Because he founded the company. A Newsweek article last month proved his last chance to articulate why he should be CEO, and he botched it. "Bleeding purple," to use Yahoo's in-house jargon for being passionate about the company, is not enough of a reason. Just because it bleeds doesn't mean it leads.
How untidy was Jerry Yang's exit from the CEO seat at Yahoo? Here's a clue: Tech blog AllThingsD obtained a copy of Yang's all-hands memo before the PR team had sent it to the staff. It must be genuine, since, like the rest of Yang's memos, it completely lacks capitalization. The founders of Internet companies are too busy, it seems, to reach for the shift key. What Yang does not explain: Why, when he took over as CEO last year, he took pains to say this was not a temporary job. His excuse seems to amount to this: The changes he has made at Yahoo are so amazing, so transformative, that it is a "significantly different company" today which requires someone who can "manage this opportunity to leverage the progress up to this point." Translation: Jerry Yang was the right man to be Yahoo's CEO, until he wasn't. The memo:
Yahoo founder Jerry Yang is stepping down as CEO, and a search is underway for a replacement after a tumultuous 18 months on the job. Which is curious. In a recent interview, Yang had just told AllThingsD's Kara Swisher, "In this uncertain environment, I think I am absolutely the right person" to lead Yahoo. He must have changed his mind; Swisher reports that the decision was a "mutual" one made by Yang and Yahoo's board of directors. Either Yang was lying to Swisher, or he was deceived about the board's lack of support for him. Executive recruiter Heidrick & Struggles is conducting a search for Yang's replacement. Finding a successor to Yang will be difficult — not because Yang is irreplaceable, but because he has made such a mess of things that it will be hard to persuade a capable executive to risk their reputation fixing it.There are, nevertheless, some possibilities. One is former eBay CEO Meg Whitman, who has been toying with entering politics. eBay and Yahoo have long flirted with a merger, so she's reasonably familiar with the company, and with the challenges of running a large Internet company. A similar candidate: Jon Miller, the former CEO of AOL, who is now a partner at Velocity Interactive Group, a venture-capital firm. Money is tight in venture capital, and Velocity has yet to raise a promised new fund in the multiple hundreds of millions of dollars it had planned for when he joined it. Yet Miller has a problem: Time Warner, the parent of AOL, used his noncompete agreement to prevent him from joining Yahoo's board; it's not clear why they would waive it to let him become CEO. The agreement does not expire until next spring. News Corp. COO Peter Chernin does not seem to have much hope of succeeding Rupert Murdoch as CEO, who is expected to hand the media conglomerate over to one of his children instead. But he does not have a credible claim for having much online experience — overseeing MySpace is the best he can do there. And lastly, as a courtesy, Yahoo's president, Sue Decker, is under consideration. Some say Decker's Machiavellian maneuverings helped out former Hollywood studio boss Terry Semel as CEO last summer. But she's seen inside and outside the company as a bad manager who lacks a vision for what Yahoo should be. More:
Is Jerry Yang the Barack Obama of Yahoo? Most employees at the flailing Web giant associate their fearless leader with hopelessness, not hope. The person who created these fliers, featuring Yang and cofounder David Filo, is either a wickedly vicious satirist, or a hapless true believer. Can you suggest a better caption in the comments? The best one will become the post's new headline. Yesterday's winner: trisomy21, for "But I need the Mac to find Cyprus on a map!" (Photo by Yodel Anecdotal)
When will Yahoo CEO Jerry Yang figure out that everyone wants him to leave? Matt Marshall at VentureBeat aired a rumor that a memo had gone out at 8 a.m. to Yahoo's workforce to expect some kind of "historic announcement" later today — a coded way of saying Yang was on his way out. Marshall wondered if it was true, or just an attempt to manipulate Yahoo's stock price. We called some Yahoos we know, and, alas, no such email exists. Even debunked, the rumor is telling: Sentiment against Yang is so strong that people are willing to believe a rumor he's leaving. (Photo by Yodel Anecdotal)
Halloween's on a Friday. With people already more worried about keeping their jobs than actually doing them, you might as well plan on writing the workday off. Trying to figure out a clever costume in which to pester your remaining coworkers? Valleywag has done the work for you. Print up one of these masks, designed by Valleywag interim creative director Richard Blakeley, on the finest-quality office paper you can steal from the supply closet, follow our tips on how to act the part, and you're good to go. Select from our list:
BoomTown reporter Kara Swisher rappelled from a skylight at Jerry Yang's secret hideout to score this draft copy of an ad, in which a bunch of tech bigwigs come out in favor of gay marriage — or at least in opposition to Proposition 8, a California state ballot initiative which would ban it. No Valley company in its right mind would be seen opposing gay marriage, so why bother?Right: Because it's an awesome branding opportunity. The draft is a self-parody of corner office drama, full of Honorary Co-Chairs, Leaders, and Former CEOs. But the real story is: Who's missing? Sergey Brin and Eric Schmidt are here, but not Larry Page. Twitter's Ev Williams is here, but not Digg's Kevin Rose. Federated Media: Present. TechCrunch: Absent. Mark Zuckerberg is not here, but Sheryl Sandberg pulled a John Hancock: She's right up top, where Owen can't miss her. Oh, look, she's trying to make nice! She's going to be sorry.
Of all the people corporate raider Carl Icahn nominated for Yahoo's board, Mark Cuban, the loudmouthed Internet entrepreneur and Dallas Mavericks owner is the guy we wished had made it. If only for the boardroom theatrics with milquetoast Yahoo cofounder Jerry Yang. Take Cuban's latest comments to Bloomberg: "Jerry's too nice a guy. He cares too much. They've got a lot of avenues they could take but all of them depend on being a lot meaner and a lot more aggressive and that's just not their style." Cuban should know: He took Yang for $6 billion during the dotcom bubble by selling Broadcast.com to Yahoo, then made sure to collar his shares so they kept their value while Yang's fortune plunged. Never heard of Broadcast.com? Exactly Cuban's point.
Sarah Lacy works at Yahoo. Sort of. As the anchor of Yahoo Finance's Tech Ticker show, Lacy is a contractor, an employment status which already makes her a second-class citizen on the Yahoo campus. But Yahoo's ostracism of its Web-video star goes further. She's not listed in Yahoo's electronic directory, and her badge doesn't admit her anywhere on campus. Jerry Yang, Yahoo's nervous-nelly CEO, seems afraid that the longtime Valley reporter might stumble across his secret layoff plans. What his ban has really accomplished: Obstructing floral deliveries.
Google crossdresser-in-chief Sergey Brin got his company, after contentious internal debate, to express opposition to Proposition 8, a California ballot initiative which would ban the same-sex marriages rendered legal earlier this year by the state's Supreme Court. Now Apple, too, has expressed its corporate views, donating $100,000 to the No on Prop 8 campaign. Who hasn't weighed in? Yahoo.We hear that CEO Jerry Yang wrote a long, rambling, presumably uncapitalized email to the troops explaining why the company, which is otherwise outspoken on gay rights, is not taking sides on the issue. Gay employees at Yahoo are purple with rage. Will someone forward us the memo? We'd love to read Yang's explanation of why, once again, he can't make a decision one way or another. (Disclosure: I got married to my husband last month, and recently held a fundraiser in opposition to Proposition 8.)
As mysterious to Yahoo CEO Jerry Yang as the location of his keyboard's shift key is the trick to communicating layoffs. Jerry, you should deliver them the way Steve Jobs unveils the latest Apple products: All at once, and tell the audience they can get them now. Instead, in his latest no-caps memo, Yang informs Yahoo employees that 1,400 of them will lose their jobs, but they won't find out any details for "several weeks." Jerry, you're doing it wrong. Here's Yang's latest botched communication to his staff:
Is Yahoo cutting 3,000 jobs? 3,500 jobs? 1,500 jobs? Fifteen percent of its operating budgets? We're going with "none of the above." What Yahoo management is really tackling are Yahoo's out-of-control salaries and titles. Yahoo, an insider tells us, has relatively narrow pay bands for specific job titles. That means the best way to keep someone getting wooed by Google or a startup is to promote them. During the Microsoft takeover battle, Yahoo liberally tossed around raises to keep people, a source who tried to recruit people away from yahoo tells us. Add to that Yahoo's epic turnover, which has led to many battlefield promotions. The result: Yahoo has VPs who ought to be directors, directors who ought to be managers, and managers who shouldn't be, period. So what's the answer? A "hard reset," our source tells us — a massive bloodletting that will purge Yahoo of the overpaid and overtitled.
Capital Research Global Investors now owns a 10.1 percent stake in Yahoo, according to a new SEC filing. Even Silicon Alley Insider is stumped as to why Capital Research chief Gordon Crawford, who fought to get rid of Yang last year, would be buying more YHOO. I go with Owen's theory: It's simple dollar cost averaging. When Yahoo falls to $13, buy it. Regardless of who's in charge. (Photo by AP/Douglas C. Pizac)
A tipster tells us Yahoo's upcoming layoffs could come in just a week. Among the people with their jobs on the line: CEO Jerry Yang. Sue Decker, Yahoo's scheming president, is hoping to oust him sooner rather than later, especially if pressure from Wall Street after Yahoo's surely dismal third-quarter earnings, set to be announced on the 21st, give her the excuse. Decker, formerly Yahoo's CFO, has been peddling her seat on the board of Berkshire Hathaway to convince fund managers that she has Warren Buffett's backing. If she pulls it off, it will be the third time Decker has knifed a colleague on her way to the top.Decker's first victim was Dan Rosensweig, Yahoo's COO. As CFO, Decker orchestrated a reorganization, behind Rosensweig's back, which effectively demoted him. Rather than accept this, Rosensweig quit, leaving a big hole in Yahoo's product organization which Decker has yet to fill. Yet she managed to blame the ensuing chaos on CEO Terry Semel, who soon followed Rosensweig out the door. Suddenly Yang, Yahoo's hapless founder, was CEO, with Decker as president. So will the third time be the charm? Decker never wanted to be Yahoo's CFO; she was talked into the job as a way station to a CEO job in Silicon Valley. She certainly has the political skills to land the job. But does she have the operational skills to do something with it? As an ex-CFO, Decker would be the first to admit, in private, that the numbers speak for themselves.