Sorry… couldn’t help myself on that headline.
Yesterday morning, while having breakfast in Boston, I read the Journal’s front page story on Brad Garlinghouse’s Peanut Butter Manifesto. My reaction at the time? Meh… it’s another Silicon Valley “leak”… perhaps I’m simply jaded, but strategic memos have been “leaking” out of Microsoft for years. After a while, the PR people convinced execs to author the memos knowing that they would be “leaked”, and then started giving them to the press.
This morning, though, the PB Manifesto is the top news in the valley. There must be at least 50 links on Techmeme alone.
Who “leaked” the memo? Was it, as Paul Kedrosky surmises, authored to be “leaked”? Is Mike Arrington right when he speculates that Garlinghouse is muscling his way into the top role at Yahoo? Or is this a carefully crafted way for Terry Semel to set Garlinghouse up as the heir apparent? Who knows!
The memo itself, when I finally got a chance to read it yesterday afternoon, was a relative disappointment. Ed Sim called it Business 101. Brad’s issues?
- Yahoo is organized as a matrix, and has all the accountability problems of a matrix organization. They’re hard to make work. Every company that is organized this way flirts with a reversion to the classic GM/business unit model. Yahoo is no different.
- Yahoo has competing business lines. Welcome to the world of big companies. We used to bitch about this all the time at Microsoft. The common wisdom was that “Bill likes to place a lot of bets”. When you’re at the top of the heap, a little internal competition for resources is healthy. It’s probably good that Yahoo Photos is trying to catch Flickr’s taillights. Perhaps Yahoo can own the number 1 and 2 photosharing sites. Brand portfolio management is certainly a strategy that has worked for P&G successfully for many years.
- Yahoo needs a 15 to 20% downsize. Too many heads for the revenue being generated.
One senior Yahooligan confided in me earlier this year that Yahoo’s strategy is a fast follow. Watch what the competition is doing, and then duplicate it quickly. Personally, I think that’s the biggest issue, and Brad’s right on the money with his observations about vision. As Andy Abramson said, with competition from Microsoft and Google intensifying, perhaps it is time for Yahoo to craft a new vision for the future. Looks like we’ll have to wait for the next memo to find out what it is, though.
By the way, Brad, if you really do hate peanut butter, I recommend trying Adams All Natural. It will make a convert out of you. It’s peanut butter with vision — pure unadulterated ground peanuts. With no sweeteners, no thickeners, and by extension no trans fats or extra calories, it’s healthy and makes a dedicated customer out of every person who tastes it. Perhaps that’s the medicine Yahoo needs.