The time was early spring 2007. Yahoo! was in the midst of yet another re-organization. CEO Terry Semel had announced the re-org in December of 2006, just in time for the holidays.
The place was a meeting at which Chief Yahoo! Jerry Yang attempted to explain why the re-org made sense for Yahoo!, for the designers, and for the researchers that filled the audience.
Jerry’s name had not appeared on any of the new org charts that he’d flipped through at length. So, I asked him where he fit and what he saw as his role at Yahoo!. He explained that, while most people at Yahoo! focused on quarterly deadlines, his role was to look into the future, to detect emerging trends, and to identify strategic business opportunities for Yahoo!. He was to keep his head up, focused on the future, while the rest of us toiled away focused on today. At the time, I was thrilled and more than a bit envious. I had long felt that Yahoo! lacked strategic vision, and there was no one better suited to provide it than Jerry. He didn’t have to get bogged down in the day-to-day trivia that captivated the rest of us. “What a great job!”, I thought. Jerry Yang was paid to be future-oriented.
Fast-forward one year. Microsoft offered to buy Yahoo! for $31 per share when Yahoo! stock had been trading at $19 the day before. Throughout a very contentious and public negotiation, it seemed as if Yahoo!, now led by Jerry, was out of sync. No one was more out of sync than Jerry himself. He was out of sync with Microsoft, with many shareholders, and with many employees. In Jerry’s mind, the $10 dollar premium per share that Microsoft offered was not enough for his investors. He could and would deliver more, just wait for 2010 he told them. Others compared the $31 Microsoft offer and the $19 share price and concluded that the deal made sense for Yahoo! shareholders today. They did not want to wait until 2010.
Jerry’s inflexible future-orientation had come to haunt Yahoo!. Microsoft, Carl Icahn, Yahoo! investors, and Yahoo! employees saw a sizable gain in hand. Jerry saw an even larger gain in the bush, in 2010. Jerry’s future-orientation conflicted with the pressing take-over situation in which he found himself. Others wanted action today. Jerry pleaded with them to look to tomorrow.
Whose perspective was “right”? We are unlikely to know for years, if ever. But we do know that the disconnect between Yahoo! executives and the others involved led to misunderstandings, mistrust, and—quite possibly—missed business opportunities for all involved. If Jerry had recognized his biased future time perspective and the present-orientation displayed by his business adversaries, he could have, at the very least, recognized a substantial source of conflict. He may have even been able to extract terms that optimally balanced the present, the future, and the interests of Yahoo! shareholders.