I guess we can't say this was unexpected. Though I have been critical of Yang in the past, I always maintained that he was only doing what he thought best for Yahoo. He can't really be blamed for the downturn in the online advertising market (everyone is hurting) or even losing market share in search to Google (Semel can take the brunt of that hit). The failure of the Microsoft deal will squarely fall on his shoulders but if it turns out a new CEO can turn Yahoo's fortunes around, the pain of that gaff will be greatly diminished.

So who would make a good CEO? I think they should go and poach a very senior executive from the Google ranks. It would have to be someone from outside the inner circle but still high enough to have had their fingers in a significant amount of Google's operations. My short list would be Shona Brown, Jonathan Rosenberg, David Eun, or perhaps even Marissa Mayer. If Facebook has shown it can poach, why not Yahoo? It has much better financials and a stronger foundation - i.e., better chance of success, in my opinion.

Some time in early 2006, I did a phone interview for a position at Google. It was a pretty standard level job, something to do with AdSense/Adwords. At the time, I had just wrapped up my first start-up and was in need of a job. The interview was relatively short and I got the impression that I just wasn't Google material. Maybe I didn't pass the GPA threshold (I was told 3.5 and under need not apply) or maybe I just didn't leave a good impression with the interviewer - who knows. Needless to say, I did not get a follow-up.

Fast forward to today and the continued free fall of Google and others in the space...

As you can see, after its $20+ drop in the regular session, Google is down almost another $7 in after hours trading. Though still a powerhouse in search and with rock solid financials, the underlying issue will be how most of the employees who came on in that early 2006 time-frame will have options that are under water. Let's not even get into the folks who joined around late 2007 when they were trading at around $700. As a significant portion of their compensation packages go poof, these talented employees will start looking elsewhere. Also, recruiting new talent will become that much harder when a big part of your compensation is getting less and less valuable. And remember all those free meals? Looks like those are getting chopped, too. C'est la vie.

Yahoo! is tanking on yesterday's confirmations from Jerry Yang and Steve Ballmer that the rumors of a new buy-out deal by Microsoft were indeed false. Yahoo!'s currently valued at about $16 billion, a far cry from the $46 billion that Microsoft had offered. The question now is, in this bad economic climate, how long will it take for Yahoo! (if at all) to reach that valuation on its own? 2 years? Maybe 4 years?

The big bet they are making is that YOS is going to blow up. I'm not necessarily sure being a platform translates into significantly higher reveneus/profits. It almost seems as if they want to get more people to interact with them in more of a Facebook style. To my knowledge, Facebook still hasn't found a way to effectively monetize all of its traffic.

I think they should take a page out of Google's book and copy AdSense but make it more open and transparent. As a former AdSense customer, it's a pretty cryptic system. "Just put this script up and trust that we'll pay you something." Yahoo! could improve upon this by treating publishers like partners and not kids. Yahoo! is at the point where they've got nothing to lose so why not try anything and everything?

So news comes today that Google has pulled out of its proposed search advertising deal with Yahoo. I once said that an independent Yahoo is good for the entire online ecosystem. I still believe that today but I have a hard time thinking that Yahoo can survive without the added cash-flow that the Google deal would have provided. The latest amended deal sent to Congress would have limited the time-frame of the deal to two years and set the maximum revenue that Yahoo could generate from Google at 25% of its search revenue. I thought this was a great compromise but I guess that wasn't what Google had originally wanted.

My first job was at a database marketing consulting firm which had Apple as its client. This was back in 1996 when Apple wasn't doing too well. Gil Amelio was CEO and the company was floundering. One of his final acts was to buy NeXT which would lead to his eventual ousting and the return of Steve Jobs. I remember in 1997, Steve Jobs is giving one of his first "Stevenotes" and in the middle of the speech, who would appear on the big screen behind him but Bill Gates to announce a $150 million investment in Apple. Thought sacrilegious at the time, this investment would provide the capital that Apple needed to carry out its plans to launch the first generation iMac and iBook. The rest is history. Maybe Yahoo needs something similar - a little jolt of outside investment from an old enemy. The question is ... Microsoft or Google?

I'm watching the CNN and NBC coverage of the election and I'm amazed with the new huge touch screen interfaces. Very impressive and I can't help but think that this is the next wave in user interface designs kicked off by the iPhone. The two point pinch is in full effect! Also, if you're in Cali and you haven't voted, do so now! It's more than just the Presidential election (which is pretty much set already for Cali) - there are a few very important ballot initiatives that are definitely not yet decided. Regardless of which side you fall under, it's important to make your voice heard. The only wasted vote is one not made.