We can all read what the business media are reporting about the departure of Yahoo!'s (YHAA) Jerry Yang: He got pushed out as chief executive officer of the company he created, because he is indecisive, ineffective and incompetent to the core.
But forget all those mean "I" words for a moment.
Let's wrap our heads around another, nicer "I" word: instructive. A savvy investor who wants to relearn a lesson need only take a little walk down memory lane. It's a pretty quick walk: Just 17 months ago, Jerry Yang was appointed CEO, and the business media were in bunches with excitement, spouting off about Yahoo!'s renewed potential under the reign of Yang, returning hero.
Now look at today's public flogging of poor, failed Yang, even from respectable publications such as
The Wall Street Journal
, which will always hit a bit below the belt -- at least when the CEO is on his way out.
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The teaser headline the
ran in its "What's News" column today read like a simultaneous help-wanted ad and backhanded slap to Yang: "Yahoo Seeks Decisive Leader."
Lest you think this was said in emotion or error, here's the lead of the related article, called "
": "As Yahoo Inc.'s board searches for its next chief executive, directors are in many ways looking for the anti-Jerry."
A couple of paragraphs later, we learn that "people inside and outside the Sunnyvale, Calif., firm said Mr. Yang's inability to make tough decisions on matters ranging from new products to strategic alliances stymied his effectiveness and failed to get Yahoo out of its hole."
According to a caption, "Employees had been excited to see what Jerry Yang could bring as CEO." But the real issue here is how excited the business media were 17 months ago, before they got out the knives.
A June 18, 2007, headline at CNET News, in the wake of Yang's appointment as CEO, came in question form: "
The answer comes soon afterward in the body of the article: "Analysts, former Yahoo employees and others say 'yes.'"
Soon we are (mis)treated to a comic reach for a happy take on Yang's appointment and all the promises that come harnessed to it:
"Yang is respected as Yahoo's co-founder and therefore holds influence. For example, he is involved in every executive decision at Yahoo, insiders say. More importantly, in this case, Yang -- whose title is 'chief Yahoo' -- is considered a passionate user of the network and dedicated to a creating a good user experience."
See, he is involved. How do we know? Well, he uses his own product!
, Yang's arrival was greeted with flowers and chocolate because of the many opportunities for mergers and other dealmaking it would bring about. But we can't blame the media for not anticipating that Yang's main legacy as CEO would be running away from a good
offer as if it had bit him.
"Yahoo may be ripe for an activist play that forces the company to explore strategic alternatives.
"While it still remains in the realm of the speculative, bankers, activist investors and media executives have told CNBC that Yahoo may be pushed to explore alternatives, and if that were to occur, the belief is that Yahoo would find interested parties in
AOL, Microsoft and
Part of the problem was the natural excitement and apparent progression of the story line:
Founder comes back to save the day.
It even played out in the real world once or twice, but it took men like
Steve Jobs to pull it off.
Far more often, founders are ill-equipped to return to manage a comeback at what has by then become a large and lumbering firm. But the business media are only focused on what just happened, not history, and this allows them to get caught up in the excitement. Just look at
on June 18, 2007:
"Yang isn't the only company founder recently to return to the helm. Jeffrey Citron, founder of Internet phone service Vonage, returned as CEO in April; Michael Dell returned to the head of the PC-maker that bears his name in January, after the company fell on hard times."
Notice, too, how many of these articles that oversell the potential of an incoming CEO end on the false up note that is always the reaction of a few after-market traders. They derive lasting meaning, placing a punctuation mark on the market's perception from relatively thin action after hours, all because it provides cosmetic support to a positive story line:
"Investors cheered the shakeup. Yahoo stock rose 4.5% in after-hours trading to close at $29.38."
Next time you read an excited article about an incoming CEO, and especially a returning hero founder, just remember how quickly the story line can change: almost as fast as the stock price. After all, it took only 17 months here.
At the time of publication, Fuchs had no positions in any of the stocks mentioned in this column.
Marek Fuchs was a stockbroker for Shearson Lehman Brothers and a money manager before becoming a journalist who wrote The New York Times' "County Lines" column for six years. He also did back-up beat coverage of The New York Knicks for the paper's Sports section for two seasons and covered other professional and collegiate sports. He has contributed frequently to many of the Times' other sections, including National, Metro, Escapes, Style, Real Estate, Arts & Leisure, Travel, Money & Business, Circuits and the Op-Ed Page. For his "Business Press Maven? column on how business and finance are covered by the media, Fuchs was named best business journalist critic in the nation by the Talking Biz website at The University of North Carolina School of Journalism and Mass Communication. Fuchs is a frequent speaker on the business media, in venues ranging from National Public Radio to the annual conference of the Society of American Business Editors and Writers. Fuchs appreciates your feedback;
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