Ever heard of atherosclerosis? Better known by its stage name “hardening of the arteries”, it’s one of those diseases that mostly kills your granddad because he hasn’t been paying enough attention to his cholesterol. A bunch of fatty whatnot accumulates on the walls of major arteries, thickening them and consequently narrowing the part that blood goes through. Then one day along comes a blockage and pow, you’ve got a new meme.
Oddly, this is a fractal phenomenon, and can happen just as easily to organizations as to people. Corporations get big and old and their arteries harden, and suddenly they can’t adapt, can’t find new ways to make money. Pow, Yahoo! has a corporate heart attack.
From Kara Swisher’s coverage of the layoffs:
The layoffs touch all units of the company, but the hardest hit is the product division, which is headed by Blake Irving, as well as its marketing, research and international units.
After the layoffs tomorrow, sources say Yahoo will be announcing a new organization by next week. Thompson, along with consultants he has hired from the Boston Consulting Group, are making what appear to be profound changes.Sources said Yahoo will most likely be comprised of a global media division, one that encompasses Yahoo’s consumer products businesses and one focused on global and regional sales. There could also be a small organization of about 50 employees aimed at future innovation.
So just out of curiousity, when you eliminate a company’s products, research, and marketing divisions, what exactly is left? The Department of Paying Scott Thompson’s Salary? The Department of Enhancing Shareholder Value By Making Powerpoint Slides About Enhancing Shareholder Value? Search?!?!
Possibly keeping fifty or so people around to think of new ideas and gutting the rest of the company so that you can profit-monger the handful of scraps you might be able to monetize more heavily is a sad fate for one of the internet’s oldest, most venerable names. It is, however, entirely consistent with the behaviour of big tech companies after a few heart attacks. Is anyone reading this old enough to remember when Unisys made computers? Or IBM? How about when AOL provided dial-up service? When companies like these discover that their arteries are clogged they seldom work their way back to fighting trim and maybe switch from javelin to shotput. Generally they stay fat and, at best, turn to coaching.
Given this turn to layoffs and strategic lawsuits, I’m guessing that ten years from now Yahoo! will have a homepage that offers something along the lines of “helping you leverage your synergized business assets in the cloud platform space” or similar. And that’ll be really goddamned sad.