Yahoo, How Do You Make Money?

Since Jerry Yang announced he is stepping down as Yahoo CEO, pundits have been pouring out advice for his yet-to-be-named successor. Most center around strategy, as in "it would be good to have one, articulate it clearly, and rally your troops around it." Some I have read even claim Yahoo has a strategy, opening its myriad services to developers in order to spread their use hither and yon.

Sadly, even if this is and will be the strategy, it is woefully incomplete.

Some years ago, I was working on a presentation for a company that was being acquired. We wanted to tell our story as clearly and succinctly as possible to the board of the acquiring company. After much debate,we included a slide simply titled "How We Make Money." In a few bullet points, it made clear how our great strategy was monetized. The acquiring board paid much attention to that portion of the presentation.

When you are as big and well established as Yahoo, this is essential, else you have no credibility. You cannot get away with keeping score by eyeballs. Income and earnings matter. So here is my advice to the next Yahoo CEO. State your strategy clearly and succinctly, and explain exactly how you'll make money executing it. Rallying the internal and external folks around it will be lots easier that way.