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TheStreet Open House

Yahoo, Trust and the Talent Shortage

NEW YORK ( TheStreet) -- Chief Executive Marissa Mayer of Yahoo! (YHOO - Get Report) is a fascinating story not just because she's relatively young and female, but because she's a technologist.

A technologist hasn't run Yahoo! for 15 years. Ever since the company's founders decided to listen to Wall Street, hire a CEO named Tim Koogle and become a "portal" and then a "media company," Yahoo! has been at odds with the ethos of its Silicon Valley home.

The company Mayer took over last summer was a collection of media properties -- news, weather, sports, business -- with most of the technology work outsourced to companies including Microsoft (MSFT - Get Report).

Mayer's primary goal is to change this, but Yahoo! is a damaged brand in the Valley. Years of putting finance ahead of technology, at Wall Street's insistence, has hurt its reputation among the people Mayer most needs to trust her, the relatively small number of super-talented programmers and thinkers from whom the next big thing may emerge.

This isn't a problem for Facebook (FB - Get Report). It's too new. It's not a problem for Google (GOOG). Google has earned the trust of talent. Even people who have left it tell me it's a good place to be from.

But it is a problem for such Silicon Valley rivals as Hewlett-Packard (HPQ - Get Report), which has had more drama than a prime-time soap over the last decade, and for Oracle (ORCL - Get Report), where everyone knows the bottom line is the only one that counts.

Strange as it may be to know, the bottom line isn't the only line talent looks at. (I'm married to a talented programmer, so I know this.) Relationships matter to talent, the work matters to talent, the team matters to talent, and the feeling that their work -- their life's work -- is in good hands matters a lot.

So, TechCrunch reports, Mayer has hired a talent scout from Disney (DIS - Get Report). She also sent "we care" packages to former key employees who felt let down by the company and sent new COO Henrique de Castro out on the road, according to AllThingsD. This all hints at big things ahead in personalization.

All this is in the name of building a new team of technologists who might create the next big thing, something mobile and personal that uses big data to deliver real value to consumers. Money alone won't make that happen. It has to be discovered, then nurtured, the way the old Hollywood studios found and nurtured talent 80 years ago.

As the economy continues to grow, the problem Yahoo! is addressing is going to become increasingly common throughout business. The talent you turned off on the way down is going to be reluctant to trust you now that we're on the way up.

Strange to be writing about labor shortages with unemployment still near 8%, but not all labor is created equal. Talent, that ineffable something that can create enormous value and create other jobs in the wake of that value, will always be in short supply.

Wall Street is going to have to learn to start treating talent the way it wants to be treated, and those companies that do that best are going to prosper most in the 2010s.



At the time of publication the author had positions in YHOO, MSFT and GOOG.

This article was written by an independent contributor, separate from TheStreet's regular news coverage.

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