Speaker 1: Brought to you by the reinvented two thousand twelve Camray.
Speaker 1: It's ready. Are you get in touch with technology? With
Speaker 1: tech Stuff from how stuff works dot com. Hello, everybody,
Speaker 1: welcome to tech stuff. My name is Chris Poulette and
Speaker 1: I am an editor at how stuff works dot com.
Speaker 1: Sitting across from me, as usual, is senior writer and
Speaker 1: Yahoo Jonathan Strickland. Hey there, so funny story. Yeah, we
Speaker 1: recorded an episode it's actually a week after we recorded
Speaker 1: it about Yahoo. Yes, and it was an epic episode,
Speaker 1: the longest we had ever recorded up to that point,
Speaker 1: which is saying something because I think our longest one
Speaker 1: before that was an hour and seven minutes long. Yeah,
Speaker 1: So we decided maybe we shouldn't inflict a gigantic episode
Speaker 1: on everyone, you know. We thought that maybe we should
Speaker 1: spare people and split that into two episodes and make
Speaker 1: it a little easier to digest. So we have done that.
Speaker 1: And uh, in our previous episode, if you if you're
Speaker 1: just joining us for the very first time, the episode
Speaker 1: immediately preceding this one, we've talked about the founding of Yahoo,
Speaker 1: how it started as a company, very much like a
Speaker 1: couple of other notable companies, in the search engine world,
Speaker 1: and how it went from a tiny to man operation
Speaker 1: to quickly escalate into a force to be reckoned with
Speaker 1: on the web, especially in the advertising world, which is
Speaker 1: exactly where we were as we were letting off at
Speaker 1: the very end of that episode, and we're gonna pick
Speaker 1: up in two thousand three and Yahoo's pioneering work in
Speaker 1: online advertising. So in two thousand three, Yahoo begins to
Speaker 1: work at proving that the online advertising model does in
Speaker 1: fact work and actually shows that there are real world
Speaker 1: effects from online advertising. And they also launched some new
Speaker 1: products like Yahoo Maps launch it launched in that year,
Speaker 1: as well as some chat rooms. And that's when Yaho
Speaker 1: began to go beyond curating content and went to content generation.
Speaker 1: They began to hire bloggers and journalists to write content
Speaker 1: exclusively for Yahoo. So Yahoo again continuing to be a
Speaker 1: portal to the web, but now not just finding cool
Speaker 1: information out there and cool stories to share, but generating them. Yeah.
Speaker 1: At the time too, they also started reaching out to
Speaker 1: the uh meat space, if you will, in addition to
Speaker 1: cyberspace for advertising purposes too, because they started working with
Speaker 1: the um major advertising companies that weren't advertising online, so
Speaker 1: they were you know, basically sort of doing partnerships with
Speaker 1: with people in the real world, so not just online. Um.
Speaker 1: And then you know who has always been, as we
Speaker 1: said earlier, at the forefront of advertising online and they
Speaker 1: started in two thousand four to look at behavioral targeting. Yes,
Speaker 1: so basically this is when we start talking about things
Speaker 1: like cookies that track what you do. Well, hey, he
Speaker 1: went to a website from a car manufacturer. Maybe he's
Speaker 1: shopping for a car car ad, Let's deliver an AD
Speaker 1: that's for a car. Yeah. This is a the very
Speaker 1: early days of targeted advertising, which has become something of
Speaker 1: a science today, but at the at that moment, was
Speaker 1: really a new idea. And again yeah, who was a
Speaker 1: pioneer in this space, you know, just as they were
Speaker 1: with web advertising in general, and um, it was you know,
Speaker 1: it was a powerful tool, you know, saying that, well,
Speaker 1: not only can we deliver your ad to X number
Speaker 1: of people, but we can deliver it to x number
Speaker 1: of people who are specifically interested in what you have
Speaker 1: to offer, Like these are people who are actively shopping
Speaker 1: for a product that you happen to make. So if
Speaker 1: you want them to go to your site, why don't
Speaker 1: you advertise with us. Yeah. I got even creepier a
Speaker 1: couple of years later too, and they started getting into
Speaker 1: the the the location base exactly, and that was when
Speaker 1: we all started going, wait, how did you know? I'm
Speaker 1: in Dallas? So now it's now now it's not just
Speaker 1: what I do, but where I live. So now you
Speaker 1: can actually advertise a local business as opposed to just
Speaker 1: some national chain that happens to offer whatever it is
Speaker 1: I'm looking for. And that doesn't sound like much to
Speaker 1: you the end user, or maybe not as much because
Speaker 1: you're going, oh, hey, that's kind of cool. They advertised
Speaker 1: for the business just down the street, but for the
Speaker 1: business just down the street, especially small businesses, um the
Speaker 1: money and and advertising small businesses to local people um
Speaker 1: rivals that of sending ads out nationwide. In fact, probably
Speaker 1: just I don't know the numbers, but I would guess
Speaker 1: that it may even dwarf that amount because you have
Speaker 1: people willing to spend locally and if they can reach
Speaker 1: their local customers online, that's really cool, and people are
Speaker 1: willing to pay for that. Yep. And in two thousand four,
Speaker 1: that's when they created some you know that they had
Speaker 1: hired the bloggers and journalists. Well, in two thousand and four,
Speaker 1: they started launching news and sports and entertainment UH sections
Speaker 1: on their page where that had stories written by these
Speaker 1: bloggers and journalists. It's also when their deal with Google
Speaker 1: was up in two thousand four that that four year
Speaker 1: deal was had expired and instead of renewing the license,
Speaker 1: Yahoo chose to employ a company called ink Tony to
Speaker 1: create a new search algorithm. So they had been behind
Speaker 1: one of the other UH major search engines online, but
Speaker 1: it you know, hadn't been as successful as say Google. Yeah,
Speaker 1: so Yahoo decides to cut ties with Google get tell
Speaker 1: Me to to provide the the horsepower for their search algorithm.
Speaker 1: And they also hired ABC executive named Lloyd Brown or
Speaker 1: Lloyd Braun if you prefer to uh to head the
Speaker 1: media operations arm of Yahoo because at this point they're
Speaker 1: still looking at getting into producing media outside the web,
Speaker 1: like they were looking at potentially doing you know, media
Speaker 1: production in the form of movies or perhaps television. Because again,
Speaker 1: you know, they're their CEO came from that world. He
Speaker 1: was a Hollywood executive, and there didn't seem to be
Speaker 1: any reason why they couldn't get into that. But that
Speaker 1: particular arm of Yahoo's business. Let's say it failed to
Speaker 1: get traction. You could also say it flopped miserably but
Speaker 1: failed to get traction. Is is probably the nicer way
Speaker 1: of saying it. One of the nice things about being
Speaker 1: accompany the size of Yahoo back at that time was
Speaker 1: that you had lots of people and lots of money
Speaker 1: and you try. Yes, you had the you had the
Speaker 1: luxury of failure. You could you could afford to fail
Speaker 1: at something, but you know, you know, you could take
Speaker 1: big chances and if they paid off, that's awesome, and
Speaker 1: if they didn't, you could absorb it um to a point.
Speaker 1: So in two thousand five, that's when the first major scandal,
Speaker 1: UH that involved Yah whose presence in China starts to unravel.
Speaker 1: And this would actually take place over the next few years.
Speaker 1: And the story is pretty grim. Um. The story is that, Okay,
Speaker 1: so the government in China is let's say it can
Speaker 1: be a little invasive, okay, and that the government of
Speaker 1: China wanted to be able to monitor what citizens were
Speaker 1: using the internet to to do, like what they were
Speaker 1: what they were accessing online. And yeah, who had a
Speaker 1: presence in China, know, So the government said, we want
Speaker 1: to be able to access your information to find out
Speaker 1: what people in China are searching for and what they're
Speaker 1: looking at on Yahoo. And Yahoo apparently complied with that request,
Speaker 1: which would lead organizations like the World Organization for Human
Speaker 1: Rights to protest and ultimately sue Yahoo, stating that essentially
Speaker 1: what Yahoo had managed to do was be complicit in
Speaker 1: human rights violations of Chinese citizens by giving the Chinese
Speaker 1: government private information. Yahoo's response was that it was a
Speaker 1: global company and that it would have to comply with
Speaker 1: whatever local laws were in place in whichever regions Yahoo operated.
Speaker 1: So it's a it's a complicated issue. On the one hand,
Speaker 1: you've got a company that's trying to do business in
Speaker 1: another country, and in to do business, it has to
Speaker 1: follow the laws of that country. On the other hand,
Speaker 1: you have human rights issues, which many people would argue
Speaker 1: transcend the law. And what do you do when you
Speaker 1: are a business? Yeah, yeah, and it's uh, you know,
Speaker 1: it was done in the in the name of doing
Speaker 1: business in China, and which is an enormous market, and
Speaker 1: it's it's impossible to ignore because there's so many people
Speaker 1: who live there m and they're also enormous competitors there
Speaker 1: as well. Um Ali Baba for one, which has a
Speaker 1: relationship with Yahoo. Um, so yeah, I mean Google. I
Speaker 1: mean well, I mean Google too, as I also had
Speaker 1: conflicts with the Chinese government and publicized ways and and
Speaker 1: that the two companies have had to endure. Um, questions
Speaker 1: from shareholders and questions from the public. A lot of scrutiny.
Speaker 1: You've got. On the one Hey, you've got the business
Speaker 1: side where people are saying, hey, I'm investing in you,
Speaker 1: and I want to return on my investment. On the
Speaker 1: other side, you've got people saying, hey, do the right thing,
Speaker 1: don't don't perform actions that are going to lead to suffering.
Speaker 1: And uh and Google and Yah who had two different
Speaker 1: approaches to this this problem. Not not that either of
Speaker 1: them were necessarily uh perfectly ethical or unethical. You know,
Speaker 1: they were different approaches, and there was there's a spectrum there.
Speaker 1: And and frankly, I can tell you I would hate
Speaker 1: to be an executive having to make these decisions because
Speaker 1: you know, you have responsibilities as a human being and
Speaker 1: you have responsibilities as a business owner. And sometimes those
Speaker 1: responsibilities don't overlap in a nice vind diagram. That's that's true. Um.
Speaker 1: And one of the arguments I've heard for doing business
Speaker 1: in China for these companies is that, um, it does
Speaker 1: open people's world up to a lot of information that
Speaker 1: they may not have had otherwise, can stretch people's minds
Speaker 1: and maybe make them more open. If the problem is
Speaker 1: that access to that information also leads to their imprisonment
Speaker 1: or otherwise harassment from the Chinese government, then there's uh
Speaker 1: that issue as well. Yeah. Now, frankly, if I have
Speaker 1: to come down on a side, I would say that
Speaker 1: I don't like what Yah who did. I mean, I personally,
Speaker 1: as a just my own personal opinion, I value human
Speaker 1: rights over that. But I was not in that position,
Speaker 1: and I cannot honestly say how I would have acted
Speaker 1: had I been in that position. And thank I'm thankful
Speaker 1: I've never been in that position because I can't imagine
Speaker 1: what that stress would be like. Also, in that year
Speaker 1: less controversial, Yeah who bought a photo sharing site called Flicker.
Speaker 1: Hm hmm, I seem to remember them. That's one of
Speaker 1: the one of the stories where Yahoo actually I think
Speaker 1: I saw a more success than Schmoogle did. No Google
Speaker 1: had had photos Google and Picasa just doesn't have have
Speaker 1: the same same presence as Flicker. Now Granted today even
Speaker 1: Flicker isn't necessarily as big a name when you have
Speaker 1: photos sharing services out there like Instagram or even stuff
Speaker 1: like Facebook or Google Plus, which Google Plus is built
Speaker 1: on top of other services like Picasa. But that's you know,
Speaker 1: it's an evolution. Uh So, Yeah, that was That was
Speaker 1: two thousand fives, big year for y'all. Who tough year
Speaker 1: with the whole China story starting to unravel. Now, granted
Speaker 1: that would continue, like I said, for a couple of
Speaker 1: years with the lawsuit really coming to a head in
Speaker 1: two thousand seven. Um in two thousan two thousand six,
Speaker 1: Yahoo and uh and Schmoogle got into a little big war. Yeah,
Speaker 1: that's that's true. And and this is I don't know
Speaker 1: why I keep saying Smoogle other than that I just
Speaker 1: like saying it. Okay, but Google obviously, if you think back,
Speaker 1: I mean, this is six years ago now. As as
Speaker 1: of the time we're recording this, Yahoo was still very
Speaker 1: much an Internet giant. They were still one of the
Speaker 1: big big players, and then they kind of still are now.
Speaker 1: But I don't think people think of them that way
Speaker 1: like they did in two thousand six. To get a
Speaker 1: lot of visitors, but man, the drama behind the website
Speaker 1: has has sort of eclipsed the site itself, and I
Speaker 1: think I would argue that the stuff, some of the
Speaker 1: things that happened in two thousand six are especially painful
Speaker 1: in the light of what's happened to all of the
Speaker 1: players since then. So yes, uh, Yahoo and Schmoogle go
Speaker 1: to war over a video sharing website, yes, uh you
Speaker 1: may have heard of it, a fairly young one at
Speaker 1: the time, Yes, YouTube. Yeah. So Yahoo was a potential
Speaker 1: owner of YouTube. They they tried to purchase the company,
Speaker 1: and Google ended up outbidding them essentially yea. And so
Speaker 1: you think of how different the world would be if
Speaker 1: that had happened. Well, um, you know it a way
Speaker 1: you think about it, you sort of take take the
Speaker 1: your current feelings about all the companies out. It's sort
Speaker 1: of fit more with Yahoo's uh package of services more
Speaker 1: so than Google, yah, because who was already in the
Speaker 1: They were the content people, yeah, content curation and creation um,
Speaker 1: and Google was more I mean they hadn't released a
Speaker 1: lot of their other products, so they were still very
Speaker 1: search engine. They were all web advertising and search engine
Speaker 1: that was their business. But you know, the world was
Speaker 1: turning social that's that's why you had sites like Flicker
Speaker 1: and and YouTube, and there were all these new social
Speaker 1: websites like this, this other company that that. Yeah, who
Speaker 1: tried to purchase You may have heard of it. It
Speaker 1: sort of decided to go it alone, but at the
Speaker 1: time they looked like they might be a takeover time.
Speaker 1: Um no, but it does start with an oh uh flick. No,
Speaker 1: they bought Flicker Facebook, that's the one. Wow. Yeah. And
Speaker 1: then it's one of those things where I went back
Speaker 1: over it and I remembered that this had happened and went, Wow,
Speaker 1: what if that had happened that two thousand six big year. Yeah,
Speaker 1: I remembered that happening. I didn't have the year for it.
Speaker 1: So ye, getting the traffic that they might have gotten
Speaker 1: from Facebook and or YouTube would have well, yeah, because
Speaker 1: their their market share for search at that point had
Speaker 1: hit a pretty low point. They had fallen to the
Speaker 1: market and Google was at so you know, this is
Speaker 1: just six years after Google had come to Yahoo asking
Speaker 1: for money, and now they were, you know, really just
Speaker 1: thrashing them in the in the search engine space. And
Speaker 1: at that point Semuel decided to kind of clean house
Speaker 1: and he sort of he re organized a lot of
Speaker 1: the top level executives at Yahoo, which UH was sort
Speaker 1: of a stop gap measure. As it turns out, one
Speaker 1: of those people who left was Lloyd Brown, the guy
Speaker 1: who was in charge of that media group. He left
Speaker 1: in in two thousand and six, so you know ultimately
Speaker 1: that that media operations UH initiative never went anywhere. It
Speaker 1: was only two years running before he had left. UM.
Speaker 1: But that leads us into two thousand seven, which is
Speaker 1: when the CEO resigns, and that was partly due to
Speaker 1: pressure being put on him by shareholders who were not
Speaker 1: happy with how much he was making versus how slowly
Speaker 1: the company was growing. And UM, actually we should point
Speaker 1: that out. He was his salary was not that big.
Speaker 1: Um it was a dollar a year. Now when he
Speaker 1: at its height, he was making six hundreds thousand dollars
Speaker 1: a year on his salary, but by the time of
Speaker 1: two thousand seven, it was officially one dollar per year. Now,
Speaker 1: granted he had a had a few stock options, yeah,
Speaker 1: like seventy million dollars worth. UM, So don't feel too
Speaker 1: sorry for Yeah, it's not like he wasn't being compensated.
Speaker 1: It's just that his official salary was just a dollar,
Speaker 1: so he steps down, and Young ends up. Jerry Young
Speaker 1: steps in and becomes the CEO, and UM and they
Speaker 1: hire Susan Decker to become the president of Yahoo. And UH. Also,
Speaker 1: Yahoo entered a bidding war with Google this you know,
Speaker 1: this happens every couple of years, apparently, UH this time
Speaker 1: to purchase an ad firm called Double Click, which you
Speaker 1: will probably recognize as one of the biggest advertising firms online.
Speaker 1: All right, so now you get the guests. Who wins
Speaker 1: the bidding war And here's a hint, it wasn't Yahoo.
Speaker 1: So once again, at this point, Yahoo's playing the part
Speaker 1: of Indiana Jones and Google is playing the part of
Speaker 1: Bellach who every time Indiana Jones gets something in his grasp,
Speaker 1: Belloc swoops in and steals it. There's nothing you can
Speaker 1: possess that I cannot take away. He's left except that
Speaker 1: Bellock actually, you know, does much better in this than
Speaker 1: in this, in this scenario than he did and raised
Speaker 1: the lust art. As far as I know, he doesn't
Speaker 1: melt in this scenario. Google seems to be pretty solid still, yep, yep. Well,
Speaker 1: people thought Yahoo was starting to fail and not be
Speaker 1: so not not be so solid itself, having a CEO,
Speaker 1: having a CEO resign because of shareholder pressure, and then
Speaker 1: be replaced by someone who is not a business guy.
Speaker 1: You know. Young wasn't Again, he was not known as
Speaker 1: a business leader. He was known as a techno technology expert.
Speaker 1: So there was a confidence in Yeah, who was beginning
Speaker 1: to wane, well, not beginning, it was continuing to wane,
Speaker 1: probably in an accelerated rate. Yeah, and so somebody decided
Speaker 1: now might be a really good time to UH make
Speaker 1: an offer. Now granted a company behind the scenes, there
Speaker 1: had been offers made already between this company and Yahoo,
Speaker 1: but in uh in two thousand and eight, that's when
Speaker 1: I publicized a well publicized offer was extended to Yahoo
Speaker 1: but ultimately not accepted. And that offer came from Microsoft. Yes,
Speaker 1: Microsoft got down on one knee in front of everybody
Speaker 1: at a sport sporting match and got on the big
Speaker 1: JumboTron and said, will you accept my bid? This is
Speaker 1: two thousand and eight, we're talking Steve Bomber Bomber strode
Speaker 1: in and eight three Yahoo employees and then said I
Speaker 1: will give you forty five million dollars for this joint
Speaker 1: that's billion with a B. Yeah, it was a billion billion,
Speaker 1: but Yahoo said, no, yeah, that was that was you
Speaker 1: undervalue us. Go back and try again. I don't Yeah,
Speaker 1: it was that's wait, no, we'd like to partner with
Speaker 1: you for search, because Microsoft was coming up with the
Speaker 1: new type of search to replace their old type of search.
Speaker 1: Except you know, I think at first it wasn't being right,
Speaker 1: but it became being It wasn't long after that. And
Speaker 1: I imagine I think live search originally right, originally, yeah,
Speaker 1: but I think I think, uh, well, put it this way.
Speaker 1: If you're in on those talks, they say, hey, you
Speaker 1: know we got this bing thing coming up. Yeah. Well
Speaker 1: in two thousand nine, uh yeah, so so yeah, they enter,
Speaker 1: they enter into a business relationship in the sense that
Speaker 1: Microsoft ends up partnering with Yahoo. Yeah, a long term
Speaker 1: business partnership, right, um, which we'll get into that. Uh.
Speaker 1: But in two thousand nine, another another tough year. Uh yeah,
Speaker 1: who ends up shutting down geo cities. Yeah, so geo
Speaker 1: cities no longer a thing, millions of people lose their
Speaker 1: animated gifts and and yeah looping minis Oh man, I
Speaker 1: do not miss those days. Um and Young steps down
Speaker 1: as CEO because again, shareholder pressure was growing. I mean,
Speaker 1: he I remember those days too. There was a lot
Speaker 1: of criticism directed at Yahoo, and some of it was
Speaker 1: directed at not giving young a chance. But I mean,
Speaker 1: there's there are a lot there was a lot of
Speaker 1: stress on both sides. And so, yeah, who ends up
Speaker 1: hiring Carol Bart's former head of former head of Autodesk.
Speaker 1: She did very well over there. She was known as
Speaker 1: a sort of a you know, a very ambitious, no nonsense,
Speaker 1: very savvy businesswoman, and that she might be the leader
Speaker 1: that they need. And she was willing to make some
Speaker 1: pretty big changes, some pretty drastic changes, uh the name
Speaker 1: of saving the company. And not all of the decisions
Speaker 1: were popular ones which would end up becoming coming back
Speaker 1: to haunt her later. And you can argue whether or
Speaker 1: not her decisions were good ones or not, but they
Speaker 1: certainly weren't popular among the board. Um. And and also
Speaker 1: I think there was there's an argument to be made
Speaker 1: of short term versus long term results, and that a
Speaker 1: lot of the changes she was making were changes that
Speaker 1: if they were successful, we're going to take some time
Speaker 1: to pay off. And there's a problem in the world
Speaker 1: of business that if you don't get short term returns quickly,
Speaker 1: you run the risk of alienating your supporters and foreshadow. Yeah.
Speaker 1: So in two thousand and ten, the company, a lot
Speaker 1: of people would say that, yeah, who was in decline.
Speaker 1: It is raking in a billion dollars of revenue a year,
Speaker 1: and somehow that's still in decline. I mean it's not
Speaker 1: it's not growing assass as it needs to essentially, it's
Speaker 1: what that boils down to. Yeah, but they still had
Speaker 1: hundreds of millions of visitors. There's still one of the
Speaker 1: top visited websites on the entire web, which is even
Speaker 1: now you know, you think about that like it's it's
Speaker 1: gendering revenue, it's getting lots of eyeballs on the site,
Speaker 1: and yet it's still being considered a failure, which is
Speaker 1: you know, if you're comparing it with itself, right, it's
Speaker 1: more to do with the Yeah, it's more to do
Speaker 1: with what's going on behind the scenes that any of
Speaker 1: its actual performance in the market. Although you could still say, well, yeah,
Speaker 1: but look it's it's search shares dismal compared to Google. Well, people,
Speaker 1: I think the thing is too for for public companies.
Speaker 1: People have a certain expectation to shareholders say Okay, you've
Speaker 1: made million dollars a year for the last ten years.
Speaker 1: When are you getting into six hundred million? You know
Speaker 1: that it staying the same is not good enough. That
Speaker 1: people expect innovation, new to rules, new services, new growth,
Speaker 1: and even when you're doing great, you know, hey by
Speaker 1: by a lot of companies, UH standards, that would have
Speaker 1: been plenty of money. But for for Yahoo, people expected
Speaker 1: it to continue to grow, and so that was the problem.
Speaker 1: Two thousand eleven, things come to a head and the
Speaker 1: board of directors decides to fire Carol Barts. So she
Speaker 1: had some choice words for them. Yeah, some some ones
Speaker 1: that we can't repeat on this podcast. This is a
Speaker 1: family friendly show. Um, Carol Bart's outspoken woman, very very blunt,
Speaker 1: and she was She was actually quite blunt about the
Speaker 1: what happened with her being fired. She said it was
Speaker 1: she was fired over the phone, as I recall, right,
Speaker 1: I think it wasn't even in an in an in
Speaker 1: person meeting, and that she was very critical of the
Speaker 1: board of directors for Yahoo and was Um, she definitely
Speaker 1: had some choice words to say, most of them not
Speaker 1: repeatable on this podcast about her experience and uh, the
Speaker 1: critical problems as far as the board was concerned. Include
Speaker 1: the fact that the sales growth had stagnated, that add
Speaker 1: sales growth was not not growing at the rate they wanted,
Speaker 1: and they felt that the deal that they had struck
Speaker 1: with Microsoft wasn't helping enough. That this this deal that
Speaker 1: was supposed to be a big benefit to both companies
Speaker 1: did not seem to be helping Yahoo the way it
Speaker 1: was supposed to, and so therefore it was a bad
Speaker 1: business decision. Um bad business. So Barnes leaves and Tim Morse,
Speaker 1: who was the chief financial officer at the time, he
Speaker 1: steps in to serve as the interim CEO until they
Speaker 1: can find a permanent replacement. Permanent being um more than
Speaker 1: five minutes, yeah, but less fewer than thirty one days.
Speaker 1: As it turns out, Yeah, permanent is uh is Your
Speaker 1: mileage may vary for the value of the word permanent,
Speaker 1: because the next CEO hired in was Scott Thompson, who
Speaker 1: was a member of the popular UH comedy troupe Kids
Speaker 1: in the Hall with Kevin McDonald and Thompson. Oh, all
Speaker 1: of my research is wrong. Now this is the president
Speaker 1: of eBay's PayPal group. Oh oh wait, no, I do
Speaker 1: have this information. Okay, So, apart from creating create funny
Speaker 1: characters like buddy, Uh this guy was I'm just kidding.
Speaker 1: I'm kidding, it's not that Scott Thompson. Fine, he he
Speaker 1: steps in, he becomes the new CEO, and at that
Speaker 1: that same time, or around that same time, Young actually
Speaker 1: resigns from the board of directors. So he had not
Speaker 1: been CEO for a while, but now he actually kind
Speaker 1: of divorces himself from the company and says that it's
Speaker 1: his time to go and pursue interests that have nothing
Speaker 1: to do with you. Who so I washed my hands
Speaker 1: of you. Yeah, the co founder walks away. Uh. So
Speaker 1: Scott Thompson becomes the new head of the company. And
Speaker 1: then by April of this year, the year we're recording
Speaker 1: this podcast, Yahoo comes out and says it's going to
Speaker 1: have to make some pretty drastic job cuts its workforce
Speaker 1: two thousand employees. Now remember back when it launched this ipo,
Speaker 1: there were forty nine of them. Now two thousand people
Speaker 1: are at least two thousand people are going to get cut. Um.
Speaker 1: He also Thompson says that he will split Yahoo into
Speaker 1: three different operating groups, one of which is will oversee
Speaker 1: the media websites. That's essentially the consumer group, one that's
Speaker 1: called the region group, which is responsible for revenue. And
Speaker 1: the third operating group is technology, which would be all
Speaker 1: the the systems running in the background that power Yahoo
Speaker 1: and UH and trying to develop those so that yeah,
Speaker 1: who can be competitive and not necessarily rely on licensing
Speaker 1: deals with other companies. Um. So he makes those those
Speaker 1: announcements in April, and then in May, Thompson has his
Speaker 1: own scandal to deal with. Yeah. I remember we were
Speaker 1: talking about how shareholders expect certain things from the company. Well,
Speaker 1: one of the shareholders was a company called Third Point, Yeah,
Speaker 1: and a hedge fund, And the thing that they expected
Speaker 1: was that the biographical information of the CEO was accurate
Speaker 1: and that the degrees that he claimed he held he
Speaker 1: actually held, which is it turns out was not so
Speaker 1: much the case. Yeah, that that was tiny problem was
Speaker 1: that Thompson had on There was a securities filing that
Speaker 1: listed one of Thompson's achievements was a degree in computer science. Uh.
Speaker 1: It's turns out to be a fictional degree due to
Speaker 1: an inadvertent error, according to Yahoo. Yeah, Yeah, whose claim
Speaker 1: was that it was just a mistake, like someone had
Speaker 1: just mistakenly attributed this degree in computer science to Thompson,
Speaker 1: and that that was it was an innocent mistake. It
Speaker 1: was not intentional. They weren't trying to mislead anyone. Third
Speaker 1: Point was having none of it. Yeah, he does, in
Speaker 1: fact have a bachelor's in accounting, accounting different science or
Speaker 1: two different disciplines. As it turns out, can't account for that. Um,
Speaker 1: you're an accountant, account for yourself. So yeah, and his
Speaker 1: number was up because with six percent of the shares,
Speaker 1: h third Point was really pushing hard. And this wasn't
Speaker 1: someone who owns a single share of Yahoo. This was
Speaker 1: someone this was a company that Cloud had enough clout
Speaker 1: to to at least raise a ruckus. Yeah, and they
Speaker 1: said we want to see Yeah, a ruckus is rationanigans
Speaker 1: can be called. And then it's get up the brooms.
Speaker 1: And he said, we want to see all of his credentials.
Speaker 1: We want a senior credentials. Yeah. And eventually Thompson actually eventually,
Speaker 1: not days later, Thompson agrees to resign from the position
Speaker 1: of CEO, and in fact there was some evidence to
Speaker 1: show that he was. The error wasn't inadvertent. Yeah, the
Speaker 1: error was not an error. It was a calculated misstatement
Speaker 1: or a misstatement of the facts, or a fabrication if
Speaker 1: you prefer. There are a lot of different words we
Speaker 1: could use. Um, a fib would be another one we
Speaker 1: could mention. So yeah, yeah, he he got defibrillated and uh.
Speaker 1: And so from the time he became CEO to the
Speaker 1: day he resigned, that span of time was a hundred
Speaker 1: and thirty days. So uh. At that point, a man
Speaker 1: named Ross Levinson, who was the media group head, became
Speaker 1: the interim CEO until they could find a replacement. And
Speaker 1: then in July of two thousand twelve, that replacement was named.
Speaker 1: And that is one of the stories that has given
Speaker 1: people a new hope. Another Star Wars reference again, Uh
Speaker 1: for Yahoo and that that new CEO Marissa Meyer, who
Speaker 1: was coming from the company that had given you who
Speaker 1: so many headaches in the past. Google. Yes, she, in fact,
Speaker 1: she was an employee number twenty. Yes, she graduated from
Speaker 1: wait for it, Stanford University. She's got a degree in
Speaker 1: symbolic systems and a master's in computer science. This now
Speaker 1: Marissa Meyer. I've listened to her speak. We have videos
Speaker 1: about of Marissa Meyer on the Curiosity website because she's
Speaker 1: one of the experts that we have consulted for the
Speaker 1: Curiosity project. Marissa Meyer is she knows her stuff. I mean,
Speaker 1: incredibly intelligent, very well spoken, very charismatic person. So she's
Speaker 1: not just well versed in the technology that is the
Speaker 1: foundation for today's web, she's also a people person. I
Speaker 1: mean she she has a charisma that some computer scientists,
Speaker 1: the stereotypical computer scientist might not necessarily possess. Uh yeah, perhaps, well,
Speaker 1: she was employee number twenty at Google and and had
Speaker 1: her choice. She had a smart gest board of offers
Speaker 1: waiting for her when she finished. She was and she
Speaker 1: was the first female engineer at Google, the very first
Speaker 1: female engineer to work for Google, employee number twenty. She
Speaker 1: specialized if you want to know what her specialization was
Speaker 1: when she got these degrees, artificial intelligence. Interesting. I mean,
Speaker 1: and here's another thing she is. She's a month older
Speaker 1: than I am. One month. She is now the CEO
Speaker 1: of YAH who she holds these degrees. She is by
Speaker 1: far wicked, smart, way smarter than I am. And uh
Speaker 1: and I am. I have nothing but admiration for her.
Speaker 1: Her accomplishments are phenomenal, and her her span of knowledge
Speaker 1: in her field is amazing to me. Yeah, she she
Speaker 1: has her work cut out for Frankly, but and some
Speaker 1: people have said that she is a little difficult to
Speaker 1: work with at times. But she's also the youngest CEO
Speaker 1: of a fortune company. She's you know, she's There are
Speaker 1: some people who say she's not tested in a leadership
Speaker 1: role of the scope, which you could. I mean, that's true.
Speaker 1: She has not had a leadership role of this size.
Speaker 1: She's headed some major departments within Google. Uh she headed
Speaker 1: the search products and the User Experience department. She also
Speaker 1: then headed the local maps and Location services department, but
Speaker 1: she's never led an entire company, let alone a company
Speaker 1: that has had as public a history of problems and
Speaker 1: issues as Yahoo. So there's it's not not to say
Speaker 1: that she is going to turn everything around and that
Speaker 1: she has the magic pill that's going to cure Yahoo's
Speaker 1: ills and make it a power player in the technology
Speaker 1: space again. But I've seen a lot more optimism, cautious
Speaker 1: optimism about Yahoo than I have in years. Oh. Absolutely, absolutely, Well,
Speaker 1: immediately after coming in and keep in mind, this happened
Speaker 1: in July. We're recording this in mid August, so she's
Speaker 1: been on the job about a month more or less,
Speaker 1: and um. She immediately came in and began making changes
Speaker 1: to the corporate to the corporate culture there. She also
Speaker 1: made an announcement that got people uh talking in the
Speaker 1: sense of wow, she just became CEO and she's going
Speaker 1: to be on maternity leave before too long. It turns
Speaker 1: out she's priggers. Um but uh and yes, but people
Speaker 1: buy and large it's it's funny because uh. With as
Speaker 1: much scrutiny as Yahoo's ceo s have received over the
Speaker 1: past few years, Um, there is the question on many
Speaker 1: news sites going can she pull this off? She's having
Speaker 1: a baby, And by and large they were the answers
Speaker 1: i've seen are yes, now, let's move on. That's why
Speaker 1: are you like worried about that? That's you know, well
Speaker 1: and well, some people might say that that would affect
Speaker 1: your judgment on what if you decide you want to
Speaker 1: stay home with the kid. Most people I've read about
Speaker 1: seem to think that she is absolutely capable of separating
Speaker 1: her work life from her home life and coming into
Speaker 1: to Yahoo every day and making a differences. She seems
Speaker 1: like she's already taken charge pretty well. I think I
Speaker 1: think most of the doubts there. There are too possible
Speaker 1: sources for those doubts. One is just that Yahoo has
Speaker 1: had so tumultuous recent past and it's hard to think
Speaker 1: of anyone getting a grip on that and and getting
Speaker 1: things to calm down and turn around. Uh. And the
Speaker 1: other is a little bit more of a sexist opinion.
Speaker 1: I think that I don't really I think it's I
Speaker 1: think it's uh immaterial, and I think that applies necessarily. Okay, well,
Speaker 1: there's maybe this is because I happened to work we
Speaker 1: both Chris and I work with some amazing women at
Speaker 1: How Stuff Works, some incredibly talented writers, editors, developers, some
Speaker 1: of whom are moms, some of many of whom are moms,
Speaker 1: and all of whom do a phenomenal job. So when
Speaker 1: you have that experience day to day, you're like, I
Speaker 1: don't understand your question. Well, it's uh, Marissa Meyer is
Speaker 1: definitely a strong person for the role, uh, no matter
Speaker 1: no matter what other personal things are going on in
Speaker 1: her life. And I really don't think she's going to
Speaker 1: intentionally let the company, and I think she's a good
Speaker 1: person to lead them through the change. That's my personal opinion. So, um,
Speaker 1: I'm kind of excited. I'm one of those people who
Speaker 1: likes to see competition out there. I think, YEAHO has
Speaker 1: a chance to uh to reinvent itself and stay relevant
Speaker 1: um in the years going forward and compete with with
Speaker 1: players like Facebook and Google on different fronts. So um,
Speaker 1: I'm I'm excited to see that they have a person
Speaker 1: like her in charge. Yeah, yeah, definitely, and it will
Speaker 1: you know, it's gonna take some time for us to
Speaker 1: see how this shakes out and whether or not it
Speaker 1: ultimately pays off, but you know, it's it's nice to
Speaker 1: see some optimism for a change, so even if it
Speaker 1: is of the cautious variety. So we will keep our
Speaker 1: eyes on the developments of Yahoo and maybe who knows,
Speaker 1: maybe uh in in a couple hundred episodes, we will
Speaker 1: revisit the company and have a whole new set of
Speaker 1: story used to tell about what has happened and some
Speaker 1: of the shenanigans and brooms that go on behind the scenes.
Speaker 1: And then the next six CEOs. Yeah yeah, that was
Speaker 1: five CEOs. Five years is rough? Uh All right, guys,
Speaker 1: Well that wraps up this discussion about Yahoo. If you
Speaker 1: have suggestions for topics we should cover in future episodes
Speaker 1: of tech Stuff. You can contact us through email. Our
Speaker 1: address is tex Stuff at Discovery dot com, or let
Speaker 1: us know on Facebook or Twitter. Our handle at both
Speaker 1: of those locations is text Stuff, H. S. W and
Speaker 1: Chris and I will talk to you again really soon.
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