Perfection, distress are close in fickle Internet world

The Baltimore Sun

Years ago, I worked in a building on San Francisco's Beach Street, where from my window I could see the pier at which large cruise ships docked each day.

Bay Area weather is notoriously fickle. One day, tourists would disembark from their ship to encounter warm sunshine, gentle breezes and the incomparable landscape of a stunning metropolis. Their several hours spent in the city were unforgettable.

The next day's group of passengers, however, might be greeted by a cold, damp, biting wind and thick cloud cover. They'd scurry to buy San Francisco-emblazoned fleece jackets at nearby Pier 39 to help them endure the bone-chilling hours before their ship departed. They would seriously question the city's romantic reputation.

Perfection and disappointment can be torturously close to each other. In the fickle world of the Internet, this is especially true.

Yahoo Inc., once the perfect Internet company with the sunniest of futures, has encountered a serious cold snap. It is shivering in the chilly shadow of the latest perfect Internet company, Google Inc., which captured 50.7 percent of the U.S. search-engine market in May, with 3.9 billion search queries. By comparison, Yahoo had 26.4 percent, with 2 billion searches, according to ComScore Inc.

Yahoo Chief Executive Officer Terry S. Semel, who helped focus the firm over the past six years but made strategic errors, lost key executives and hadn't enlivened the stock price, resigned recently to become nonexecutive chairman.

In hopes of replicating what bringing Steven P. Jobs did for Apple Inc., Yahoo now has co-founder Jerry Yang as its CEO. There is no particular reason to believe that Yang is another Jobs, though he is respected as a thoughtful troubleshooter who can attract talent.

Yang will have to move boldly if he is to pull Yahoo back into the sunshine, whether through major initiatives, deals, partnerships or even a merger. His first significant action, signing the purchase of collegiate athletics Web site, was a small step.

Bigger issues include dealing with a reported offer from Rupert Murdoch's News Corp. to swap in exchange for a 25 percent stake in Yahoo. He must turn back challenges to Yahoo's online advertising business and derive money from crucial Internet areas such as video and social networking.

It may be that Yang will be a temporary CEO. Susan Decker, Yahoo chief financial officer who became president in the reshuffling, or an outside candidate may eventually be put in charge. But there's no time to waste.

I chatted a year ago with a college student who had toured Yahoo headquarters with classmates.

He told me one of his fellow students had said while on the tour, "Yahoo is so dead and Google is why."

Not really dead, but fickle Internet weather is not favoring it.

Andrew Leckey writes for Tribune Media Services.

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