• Eweek, Tuesday, August 5, 2008 12:15 PM

Eweek talks to Eric Jackson, President of Ironfire Capital, one of Yahoo's biggest investors, who recalls the infamous "Peanut Butter Manifesto", written by former Yahoo exec Brad Garlinghouse in 2006, in assessing what's wrong with the Web giant. "Yahoo is too bloated right now," Jackson said in an interview following Friday's shareholder meeting. "They need to reduce head count, focus on core businesses and divest some of their holdings that aren't making any money."

As Garlinghouse wrote, "I've heard our strategy described as spreading peanut butter across the myriad opportunities that continue to evolve in the online world. The result: a thin layer of investment spread across everything we do, and thus we focus on nothing in particular. ... I hate peanut butter. We all should." Jackson describes the leaked internal note as, "as fresh today as it was back then."

He adds that Microsoft may come back for Yahoo next year, especially if the software giant's Online Services Division stays weak and Yahoo's stock fails to recover. "You look at their last quarter's numbers for that group, and it's clear that they are falling further behind. Their desktop business also showed deceleration. Yahoo helps with both problems," Jackson said.

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