Yang Blood

LEE HAN SHIH
Dec 15, 2008
*Special to asia!
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Yahoo! co-founder Jerry Yang has returned to helm the company which may be headed for a merger with Microsoft.

Will Jerry Yang do a Steve Jobs? Will he sell his company to Microsoft and end up running the biggest software company on earth?

The 38-year-old Taiwan native who came to America at a young age is a legend in Silicon Valley. The story of how he overcame language obstacles (he was said to have known only one word when he arrived) to become a straight A student is well known. He got his bachelor’s and master’s degree from Stanford and postponed his PhD in electrical engineering to take time off to set up Yahoo! with fellow student David Filo. Yahoo! has grown to become the biggest portal on the Internet.

Yang retreated to the background for six years, bearing the title of Chief Yahoo!, while Terry Semel ran the show as CEO. Semel stepped down in mid-June after failing to prevent Yahoo! from losing market share to upstart Google. Yang is now interim CEO.

This sounds eerily like Steve Jobs’s return to Apple, the only difference being that Jobs was kicked out by his directors and Yang has never left his company. Jobs also held the title of interim CEO which eventually became permanent.

Apple today remains independent and is growing from strength to strength. But Jobs has sold his other company, Pixar, arguably the best animator in the movie business, to Walt Disney and ended up being the power behind the throne of the entire Disney empire.

The same could happen to Yang. Wall Street applauded Yang’s return to the driver’s seat and Yahoo!’s share price rose as a result.

But despite his familiarity with Yahoo!, there may not be much Yang can do to stem Google’s growth. The problem is that Semel had let too much time lapse before taking action against Google. He could have conceivably killed Google or at least have stunted its growth a few years back. Instead Yahoo! was using Google’s superior search engine for its portal, thus giving the upstart the break it needed to make its name with Internet users.

Google today has momentum on its side, not to mention a huge war chest for acquisitions. It is the undisputed king of advertising on the net and is moving to rake in ad dollars in non-net areas. It is difficult to see what Yang can do to turn the tide.

Well there is one thing he can do to try to regain the top position—sell out to Microsoft. Talk of a Yahoo! and Microsoft merger (or takeover by Microsoft) has been in the market for at least two years. Many have dismissed it as they see the clash of culture—the relatively freewheeling attitude of Yahoo! and Microsoft, which runs like communist China—would destroy the alliance.

But Microsoft is sorely in need of new blood, as it is increasingly evident that its CEO Steve Ballmer is incapable of coping with Google. Bill Gates, the brain behind the outfit, is also due to retire in two years. Acquiring Yahoo! would raise Microsoft's profile on the Internet. It would also open the door for Yang to help shake up Microsoft’s fossilizing software department. If Gates is looking for a Steve Jobs to revitalize his company, he could hardly do better than Yang.

 

lee han shihLee Han Shih is the founder, publisher and editor of asia! Magazine.

 

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