• The Economist , Friday, November 14, 2008 11:45 AM

Never a publication to mince its words, The Economist flatly states that Yahoo CEO Jerry Yang must go. In fact, the business journal goes so far to say that Yang should have never re-assumed the role of CEO in the first place. "A mistake it clearly was," the report says, "and it is time for Mr. Yang and Yahoo's shareholders to say so."

Where did it all go wrong? When he took over in June 2007, Yang thought he could, "through sheer passion for his creation," revive Yahoo, which had failed under Hollywood mogul Terry Semel to turn into a major media company. In their myopic quest to bring Hollywood to the Internet, both Yang and Semel dismissed the threat of Google. Whereas Yahoo saw itself as a portal to the Web's media content, it was Google that, through a simple search box, ultimately became the gateway for most consumers to the Web's riches. It also became the de facto way for advertisers to generate direct response leads. As Yahoo began to understand that Google's way was the future, the Web giant tried to catch up, first by hiring and then by firing and replacing Google as its search provider with its own in-house team. Since Semel's departure, things have gotten even worse for the once-mighty Web giant. First came Microsoft with the $33 per share bid, which Yang dismissed as not high enough. In the end, he says he was willing to sell for the right price, and that both sides were to blame. "But Mr. Yang never offered a clear alternative to Microsoft's proposal," The Economist says. Instead, he went back to Google looking for a search deal, which regulators quickly blocked. Now, executives are fleeing the company and the share price is below $11. Time to go, Jerry.

Read the whole story at The Economist »