A steady stream of key executives continues to head for the exits at Yahoo! (YHOO) -- just as the beleaguered Web giant can use a helping hand.
On Monday, Yahoo! confirmed that David Katz, operating head of Yahoo! Sports and Yahoo! Studios, had left the company last week. Meanwhile, the blog TechCrunch reported that Michael Marquez, Yahoo!'s director of corporate development, left the company on Friday to head up investments and acquisitions for
Interactive Digital Strategy division.
Katz and Marquez are just the latest in a string of Yahoo! executives to jump ship recently, as the company continues to flounder publicly in a year the stock has lost nearly a third of its value. In November, Yahoo!
saw two high-profile departures in its Publisher Network Group. The company has also lost its vice president of shopping and vice president of developer network, among others, this year.
Musings about Yahoo!'s grand strategy in the infamous
Peanut Butter Manifesto or speculation about whether CEO Terry Semel will be replaced have taken center stage with many pundits. But shrewd investors will be watching the movement of Yahoo! heads across its myriad business groups.
Not only do these executives have a better vantage point from which to gauge Yahoo!'s future, but high-caliber talent in these ranks will be necessary to turn Yahoo! around -- no matter which strategy the company adopts, or who is at the helm.
Yahoo! seems to agree, citing the retention of executive talent as one of its key business focuses. "If we are unable to retain our existing senior management and key personnel and hire new highly skilled personnel, we may not be able to execute our business plan," Yahoo! said in its recent 10-K filing. The company's top brass "have acquired specialized knowledge and skills with respect to Yahoo! and its operations. The loss of any of these individuals could harm our business."
With Katz' departure, existing general managers in Yahoo!'s Sports and Studios divisions will continue to push those efforts forward, said Yahoo! spokesperson Charlene Fitzgibbon.
Marquez, meanwhile, "was a key member of the Yahoo corporate development team, and guys like that don't generally walk away unless they smell blood," according to TechCrunch.
Both Katz and Marquez will be leaving at a point where their skills may have been especially valuable to Yahoo! Katz, who joined the company in the summer of 2005 after eight years at CBS, was a key player in Yahoo!'s aggressive move into video, among other forms of media.
While its rich media background is expected to give it a leg up in the arena over the more technologically oriented
, Yahoo! is not without its share of glitches. Media reports surfaced that Yahoo!'s high-profile partnership with CurrentTV was in peril last week, even as Google charged further into the market with its $1.65 billion acquisition of video-sharing site YouTube in October.
Marquez departs to work with Quincy Smith -- the noted dealmaker and former investment banker who was just pulled to head up CBS -- to look for potential acquisition targets. "It's clear that CBS Interactive will be active on the acquisition front," writes Tech Crunch. But his talents would have been a big help for Yahoo! at a time when the Web giant is looking for innovative companies to acquire as a shot in the arm.
Still, Yahoo! hasn't been able to close any major deals -- despite reports of negotiations with rapidly growing Facebook and speculation of a pickup of social networking site LinkedIn -- and the company's murky outlook plays a large role in this.
Yahoo! has $1.2 billion in cash on hand -- far short of Google's $3 billion -- and would likely have to bank heavily on its stock in any major acquisition. Google's acquisition of YouTube, for example, was an all-stock deal and signified not only YouTube's confidence in Google's prospects, but that of YouTube's venture capital investor Sequoia Capital -- one of the savviest investors in Silicon Valley, which was an earlier backer of both Google and Yahoo!.
But before Yahoo! can expect to bring a major new company onboard, it will have to persuade existing executives to stay put. And while the spotlight is on strategic talk, investors should be watching the rank of executives who will end up having to deliver on whatever vision the company creates.