3 Lessons From Yahoo's Meltdown, From An Insider - InformationWeek
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Patrick Houston
Patrick Houston
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3 Lessons From Yahoo's Meltdown, From An Insider

A former Yahoo exec who was laid off offers insights from the company's five-year drive to self-destruction.

Lesson Three: When it's no longer time to persevere, don't. Bartz may not have been cut out as Yahoo's consummate CEO, but Yahoo's board and its executives certainly should have taken to heart a motto she's recited since her Autodesk days--one she invoked this past week during a business school commencement address: "Fail fast forward." Recognize your errors, quickly, and then move on.

Instead, Yahoo continues hang back and on to its gloried past--when it enjoyed the same stature Facebook does today. But its brief bright shining moment is over. Its shareholders, employees and users would have all been better off had it relented to Microsoft's takeover. The rationale for resisting: Yahoo and its shareholders were better off betting on its prospects as independent company. False. A Microsoft-Yahoo combo would have made a far better rival to Google in search, and sooner. And, paired with Microsoft's MSN/MSNBC brands, it would have been a media juggernaut, one too big to fail.

Now, it may simply be too late for Yahoo to thrive as a standalone company ever again. Even setting CEO Scott Thompson's fudged resume aside, the Loeb-led shareholder's fight is exacting a toll the long-struggling company simply can't endure.

It's gotten to the point where Yahoo is looking like the Information Age rendition of industrial age icon GM--a company destined for an irreversible slide into oblivion.

Yahoo isn't just a case study for CEOs, board members, high financiers, and business school professors. There's much to takeaway whether you run a tech startup or an IT department.

You have to work hard to identify your competencies, especially those that differentiate you from others. You have to brutally honest about yourself, your team, and your organization: You can't allow others to define you, especially if they work in a nearby segment or industry. Never get too insular, but look instead to other industries, companies, or regions outside your own neighborhood.

And when staying the course isn't working after a decent interval, admit it.

Patrick Houston is the co-founder of MediaArchiTechs. He is a former SVP for a new media startup, a GM at Yahoo, and editor-in-chief at CNET.com. He can be reached at patrick.houston@mediaarchitechs.com.

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