
Having nine months of time away from Yahoo has given me a bit of perspective. Things really gelled for me as I was listening to Jeff Housenbold (CEO of
Shutterfly) on the
Stanford Entrepreneurial podcast. In his
Tips for Career Success, #3 is
"Go where the money is made in the company."Yahoo makes its money from advertising. To make money in advertising on the web, you need to have "inventory" (popular web sites that a lot of people visit). But you also need a way to sell those ads. You need tools like campaign management, analytics, budgeting, reporting, A/B testing, and a whole host of others that are compelling, easy-to-use, and generally encourage advertisers to spend as much money as possible. In short,
you need to meet the needs of advertisers, who in turn will give you money.And as far as I knew in my three years at Yahoo, we weren't doing that. I worked on the inventory side of things in the groups that built Mail, Messenger, Photos, Groups and 360. The primary exposure we had to ad sales was the requirement to
include space in your design for IAB standard ad units.The people I worked with on these inventory products were some of the best and brightest out there. Yahoo! Mail, Flickr, Delicious, Front Page and (if I do say so myself) Messenger are truly best-in-class services. Why couldn't the same be said for our ad sales tools? Why didn't Yahoo spend equal time promoting the ad sales side of things internally? Why wasn't I or more importantly my superstar peers actively recruited to go work on the ad sales tools, the very products that most directly generated money for the company? Inventory is important, but from where I sit now, generating ad sales is even more important. If you have the sales, you can easily create or find the inventory on the web.
A colleague of mine in research wanted to become a product designer. My advice to him was to go over to the ad sales group where there was a ton of low-hanging fruit and a ton of opportunity to tangibly improve Yahoo's financials. I only now realize how bad that sounds. Why would Yahoo treat such an essential piece of the business a second-class citizen? Why should that be the entry point for a rookie designer? Why isn't that where the rock star designers go after paying their dues on the "lowly" inventory products?
A friend of mine who was a PM at Yahoo shared his story of going down to LA to visit the Search Ad Marketing team. He was shocked. He said it was huge; at least as big as the main HQ; maybe bigger. It's the biggest secret Yahoo is keeping from its own employees.
This in contrast to Google. When I interviewed there in late 2004, they made it quite clear there were two main groups: end-user web sites, and advertiser (plus internal) tools. The groups were equally well respected. Both groups got similar exposure in internal communications. Employees moved between the two regularly.
Brad Garlinghouse got it partially right with his
peanut butter manifesto. But it's not just redundant inefficiencies that are hobbling Yahoo; it's also inequalities in their product lines. Yahoo needs to make ad sales tools a high-profile, career-accelerating -- and yes even sexy --job where the best and the brightest vie for limited positions on great teams, and the ones who succeed are known and revered by all throughout the company. I hope the new organization is geared up to fix this, but from what I've seen in the press, it unfortunately doesn't look like it.
If you're a Yahoo employee, I'd love to hear your thoughts in the comments.