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Nov 18 2008 11:06AM EST

Yang: Another Founder Flounders

Sam Gustin writes: During Jerry Yang's 18-month tenure as chief executive of Yahoo, no one ever doubted his love for the company. "All of you know that I have always, and will always bleed purple," Yang wrote in a letter to employees Monday announcing that he will step down.

But in Silicon Valley, as in the rest of corporate America, love is not enough, even coming from the visionary founder of one of the web's most recognizable names. Execution must follow. And that is where Jerry Yang failed.

It's been clear for months that Yang was entirely unsuited to manage the company  he co-founded in 1995. Yang should never have been named C.E.O. He should have remained as Chief Yahoo, the position to which he returns, and left the actual management of the business to someone else who didn't carry the emotional baggage that he brought to the job.

Yang's downfall highlights a fundamental business lesson -- especially true in Silicon Valley -- that Yahoo failed to heed: A visionary founder does not a successful C.E.O. make. Google co-founders Larry Page and Sergey Brin understood that when they brought in Eric Schmidt, a seasoned tech executive, to run their company. Facebook's wunderkind founder Mark Zuckerberg is still trying to achieve that balance with new C.O.O. Sheryl Sandberg.

What Yahoo has needed for the last two years -- and needs now more than ever -- is an experienced manager who will lay out a strategic mission focusing on the company's strengths, while trimming unnecessary assets and resources. Yang was simply too emotionally attached to Yahoo to make the tough decisions in the best interest of the company, until it was too late. Tragically, Yang's loyalty was to the idea of Yahoo, not to the interests of Yahoo's owners, its shareholders.


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