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Jerry Yang just put up a blog post on his reasons for stepping down as CEO of Yahoo.

In it, he highlights the successes of the past 18 months. Yahoo is now “rewired,” the new ad platform has been launched “that we think will transform how ads are bought and sold online,” and Yahoo remains “first or second in more than 20 product categories.” And he ends with the promise “that I will always bleed purple.” No matter what his critics might say.

The post is reproduced below in its entirety:

As you’ve no doubt already read, I’ve decided that I will step down from my role as Chief Executive Officer after my successor has been selected.

Ever since founding Yahoo! with David Filo 13 years ago, I’ve been passionate about this company, its brand, its employees, and the millions of people around the world who consider it their online home. That’s why I accepted the Board’s request to become CEO in June 2007, taking on the challenge of transforming Yahoo! at a time when the industry was evolving quickly and we needed to rethink and restructure our business.

And despite the tough external environment that we face, I truly believe we’ve made tangible progress in bringing our strategic vision to life. Most significantly, we’ve rewired our entire network to create a Yahoo! that has opened its doors to outside publishers and developers. We’ve launched an advertising platform that we think will transform how ads are bought and sold online. And we’ve continued to grow our audience –- standing first or second in more than 20 product categories and demonstrating that Yahoo! is the place users turn for major events like the Olympics and the Elections.

And now I believe the time is right for us to bring in a new leader –- someone who will build on the important pillars we’ve put in place and who will take the reins on the critical decisions our company faces. As for me, I’ll be returning to my role as Chief Yahoo and board member once my successor is named. I’ll go back to focusing on our global strategy, product excellence, technology innovation, and working with the Board and our executive team to help Yahoo! realize its full potential.

It’s been an extraordinary year here at Yahoo! –- for all of us. I’m really proud of the determination and resilience of Yahoos around the world who are so committed to giving you the best Internet experience possible. It is for them, and for you, that I will always bleed purple.

Jerry Yang
Chief Yahoo! and CEO

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Source: Erick Schonfeld

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We all know online advertising decelerated in the third quarter, but how bad was the slowdown overall? To find out, I added up the online advertising revenues for Google, Yahoo, Microsoft, and AOL, which together account for the majority of online advertising. In the third quarter, growth pretty much ground to a halt. The combined ad revenues of those four Web bellwethers eked out only 0.6 percent growth, quarter over quarter. That sequential growth rate was 12.7 percent in the fourth quarter of 2007, to 2.8 percent in the first quarter of 2008, and 1.1 percent in the second quarter (see chart above).

On an absolute basis, the combined ad revenues for all four companies during the third quarter increased by only $50 million to $8.2 billion. The year-over-year growth rate was still a healthy 18 percent, but those comparisons will likely flatten out as well starting in the fourth quarter.

For the purposes of this analysis, I took the total advertising revenues from both Google and Yahoo, including their network revenues paid to affiliates, the online revenues reported by Microsoft, and only the advertising portion of AOL’s revenues. There were other companies I could have added, but these four serve as good proxy for the overall online advertising market. Below are the absolute revenue numbers, broken down by company:

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Source: Erick Schonfeld

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If you’re curious about the talk that spurred such negative coverage of Yahoo CEO Jerry Yang yesterday, here it is. From our perspective he’s out of gas. And needs to step aside for a new leader.

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Source: Michael Arrington

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Trying to push through their search advertising deal, Google and Yahoo have revised the terms of the deal to satisfy antitrust objections by the Department of Justice, reports the WSJ (article behind the pay wall). The main concessions are putting 25 percent cap on the search-related revenues that Yahoo can generate from the partnership and making it a two-year deal instead of a ten-year deal.

Putting a revenue cap on the deal goes a long way towards limiting the monopoly factor because Google will only be able to take a quarter of Yahoo’s search-advertising business instead of all of it. As Michael has wrote a couple weeks ago:

A cap means Yahoo can only rely on Google to a point, and if the cap is small enough then Yahoo will be forced to continue to invest in their own search business, so it removes a lot of the meat behind our objections.

The original deal was non-exclusive and was expected to bring in $800 million in additional revenues to Yahoo. There was also an escape clause in case of an antitrust lawsuit or if a minimum revenue threshold is not met. A 25 percent cap on search revenues would cut that $800 million in half.

But maybe this is just a stalling tactic until a new Presidential administration and new Justice Department officials come into office. Would the Google-Yahoo deal do better under an Obama or a McCain administration? Google CEO Eric Schmidt’s endorsement of Obama will not be forgotten—by either side.

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Source: Erick Schonfeld

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Live video streaming seemed to be all the rage for a while, popularized by startups like Justin.tv, Ustream, Qik, Mogulus and Flixwagon.

Yahoo jumped on the hype wagon back in February 2008 by launching Y!Live, an ambitious effort put forward by internal incubator Yahoo! Brickhouse. Yahoo Live was supposed to tap into the troubled internet juggernaut’s vast online video audience by getting them to broadcast their lives in real-time.

Now Yahoo software engineer Keith Thornill has published a blog post announcing that Y!Live, which never really passed the idea stage, will effectively stop broadcasting December 3. Yahoo is hosting a townhall on Wednesday to wish the service farewell.

Live video streaming still presents an enormous opportunity considering the way people’s behavior on the web is changing, but it is of course extremely expensive and hard to scale. Serving the same video to thousands, let alone tens of thousands of people simultaneously generates higher bandwidth bills than serving them asynchronously like most video sharing sites do. YouTube, by far the most popular online video property on the web, is rumored to want to start experimenting with live video streaming some day, but so far we haven’t seen anything surface.

Perhaps the Yahoo from a year ago would have no problem continuing to test the waters and keeping the service alive a bit longer, but the way things are looking now they’ll be looking to cut costs in every possible way for a while.

It’s also quite telling for the service’s popularity that no one has cared to comment on the blog post yet (they were probably in moderation when I wrote this). Also, at the time of this writing there are exactly 1,379 people watching 48 live channels.

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Source: Robin Wauters

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Yahoo launched their new profile product last week as part of their big plan to social networkize the entire Yahoo world. Every Yahoo profile was reset, and users were asked to go through a process of recreating it.

The comments from users were unambiguous - they were pissed off.

Common complaints include the fact that the new profile must include your full name, which your connections (friends) can see, as well as the removal of a few features that I’ve never heard of (like Cool Links) that apparently some percentage of users really, really liked. But by far the biggest complaint was the fact that all of the information in the old profiles was wiped clean, and users were presented with a blank slate like the one above (which is mine). Some users also noted that there was no message on that blank profile letting users know what just happened to their data. You had to go to the blog posts to understand what happened.

Meanwhile, Yahoo scurried to respond. In one of the blog posts, Melissa Daniels, Yahoo’s Community Manager, said “We know this has been a rough transition for some of you and, and are committed to helping you use, understand, and (hopefully) enjoy your new profile.”

That just seemed to enrage users more. An example comment: “I agree Making a second rate copy of facebook while breaking everything else people come to yahoo for is a good way to go out of business.”

As critical as I’ve been of Yahoo recently, I’m mostly supporting them in the profile transition.

Communication with users was definitely poorly executed, and users should have had a message on their profile page telling them what was going on. But the team is clearly trying to fix that. VP Communities Jim Stoneham, who just joined Yahoo six weeks ago to lead the project (Welcome to Yahoo, Jim!), has a single message on his profile: “listening.” And Yahoo has at least kept a copy of the old profile information for users who want it back:

We also know lots of you worked hard on your old profiles and want your data. If you feel like you’re missing data, we’ve saved a copy of your old profile (and alias) and our Customer Care team can retrieve this information. You won’t, however, be able to revert back to your old profile format, but you will be able to get any data that you think is missing. To do this, please go here http://help.yahoo.com/l/us/yahoo/profiles/general.html to contact Customer Care.

A lot of profile data is still there, anyway. I went through the new profile setup and it retained my name, age and interests, and displayed it after I was done.

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Source: Michael Arrington

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Yahoo News has launched a beta version of its massively popular news site that reaches a reported 44 million unique visitors a month. The new site has introduced a number of basic aesthetic changes (the font is slightly larger and there’s more space between text) along with some new design changes that incorporate rich media and gear the site to better serve its diverse variety of readers. To get to the new site, head to Yahoo News and hit the link at the top of the page.

Alan Warms, Yahoo’s VP GM of News, Technology, and Education, says that the site has been tweaked to allow its editors more flexibility when it comes to incorporating media like videos and photos. He also says that the site is being adjusted to give readers easier access to content: at the bottom of each article the site will now include a handful of links to related stories and popular articles, both on Yahoo and elsewhere on the web (this feature incorporates the Buzztracker technology that Yahoo acquired last year).

Yahoo will will also pay attention to where its users are coming from - if a reader comes from Digg or Yahoo Buzz, only five paragraphs of their news stories will be shown initially, with the related links prominently featured (Yahoo figures that these readers are more likely to click through to new stories, and are less concerned with reading the full article). Readers who visit Yahoo News directly will be shown the full articles by default, and there will be an option for all readers to automatically show full articles.

Because of Yahoo’s massive amount of traffic it has to be careful whenever it institutes a new design, so the site may remain in beta for some time. Last month the site launched a new home page for the first time in over a year.

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Source: Jason Kincaid

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With the appointment of Frank Biondi, Jr. and John Chapple to Yahoo’s board of directors today, the last two slots on the board are now filled. Biondi, the former CEO of Viacom, and Chapple, the former CEO of Nextel, were both on Carl Icahn’s original alternate slate when he was still trying to replace the entire board. As part of his compromise with Yahoo, Icahn backed down from his proxy battle in return for three seats on the board.

After Icahn took his board seat following Yahoo’s shareholder meeting, the only question left was who would take the other two seats. One of them was initially reserved for former AOL CEO Jonathan Miller, until Time Warner pulled it out from under him. So the rest of Yahoo’s board chose Biondi and Chapple as the two least objectionable of Icahn’s henchmen. You really didn’t think they were going to vote for Mark Cuban, did you? Although, that would have been much more entertaining.

Now Icahn, Biondi, and Chapple (The Icahn Three?) can vote as a block, although they won’t be able to block anything outright on the 11-member board. But they are not there to block anything really. They are there to approve and encourage another deal that results in the sale of Yahoo.

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Source: Erick Schonfeld

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