A four-page internal memo penned by a Yahoo
executive to highlight company deficiencies instead points to the strengths of the
veteran Internet company. That’s the spin now given to the
corporate call-to-arms dubbed “The Peanut Butter Manifesto.”
The memo, written by senior vice president Brad Garlinghouse, notes that Yahoo has “an open, collaborative culture and a senior management team
that is intensely committed to helping Yahoo fulfill its potential as an
Internet leader,” a Yahoo spokesperson told internetnews.com.
Written in October, the Garlinghouse memo is now prompting many to question what Yahoo must do to stop its decline and prevent it from becoming an also-ran behind Google
In the memo, Garlinghouse said by offering a wide array of services ranging
from dating to auto sales to blogs and contests,
Yahoo has lost its focus. The executive suggested job cuts and the
need to hold company executives responsible for performance.
However, Yahoo said at its recent third-quarter earnings call, CEO Terry
Semel “sent a very clear message that Yahoo is sharpening its focus on three
key areas in order to better exploit its considerable strengths,” according
to a spokesperson.
Those areas are closing the gap in search, widening Yahoo’s lead
in graphic ads and seizing emerging opportunities in social media, video and
Such memos are nothing new, according to industry watchers.
Before Yahoo, Microsoft
CEO Steve Ballmer used the analogy to describe the sometimes difficult choices companies must make when charting a
course for growth.
“It becomes very hard to focus, because everything looks good,” said Rob
Enderle, principal analyst with the Enderle Group.
The same concerns are being voiced in the boardrooms of Internet giant
Google, only the “thrashing is concealed” since the company is still in its
heyday, according to Enderle.
Whether Yahoo will adhere to the memo’s suggestions is not the question. The question is how.
Because the many Yahoo services maintain an army of supporters with various ties to corporate leaders, it will be difficult to make significant changes with the current executives in place, Enderle said.
“Yahoo needs to send the message it’s not the same old stagnant Yahoo out
there,” advised Foster & Sullivan analyst Mukul Krishna.