Choosing Yahoo's next CEO

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Dan Farber: I'm Dan Farber from CNET News, and I'm here with Kara Swisher from All Things Digital. And a big week...

Kara Swisher: Big week.

Dan Farber: ... for Jerry Yang. Finally decided...

Kara Swisher: He steps down.

Dan Farber: ...to step down.

Kara Swisher: Mm-hmm.

Dan Farber: Or the board finally woke up.

Kara Swisher: Well, I think it was a combination. I think they were telling the truth in that case. I think he realized he was in over his head and couldn't turn around Yahoo as quickly as it needs to be turned around. And even though the economy is affecting all tech companies, Yahoo's problems have been going on for a very long time. And they need fresh leadership.

Dan Farber: Well, now that they need fresh leadership, you just published a post...

Kara Swisher: Mm-hmm. A list.

Dan Farber: ...on All Things Digital with a list of people. And at the top of your list was Peter Chernin...

Kara Swisher: Indeed.

Dan Farber: ...from the Fox Company.

Kara Swisher: From News Corp, actually. He's the COO and President.

Dan Farber: So what makes you think...

Kara Swisher: Which owns our site, by the way. Full disclosure, not that we care.

Dan Farber: Okay, what makes you think he would be a good candidate because he seems to be from the cloth of Terry Semel?

Kara Swisher: Old media, yes. No, he's a different executive. He's been seriously running a major operations role at a company for many, many years. Terry ran a studio. This guys running divisions that -- you know, newspapers, studios, music, MySpace. He's got a lot of stuff under his wing. And he's --you know, he is a media executive, and that's the issue. Is Yahoo gonna be a media company and go into advertiser, or is it gonna be a technology company? Or what is it -- or a platform company, as Jerry Yang has wanted it to be? And I think that if they're going to be a media company, and sell off search, and they eliminate more of the technology focus, someone like that is smart. Another person they put in as a dark horse was Kevin Johnson, who was actually the digital head at Microsoft brand, Windows Live, brand -- lots of stuff, ran a lot of divisions.

Dan Farber: And he just took a...

Kara Swisher: A job at Juniper Networks. But he was the one in charge of buying Yahoo, which was a botched attempt by Microsoft, kind of botched effort by Yahoo, too. But he was the one who was going to be head of Yahoo once they bought it. So I still think he's an interesting idea because he has the technology background.

Dan Farber: Now, there's an insider, Sue Decker, who was the CFO...

Kara Swisher: Mm-hmm. Indeed.

Dan Farber: ...and is now President of the company.

Kara Swisher: Right.

Dan Farber: But I think most people are down on her.

Kara Swisher: Yeah, I think people like to -- are being polite about using the word "considered," but inaudible investors have put a big -- you know, mark on her, and said, "No way." She's affiliated with Jerry Yang, as are several executives there. So...

Dan Farber: Well, let me run through this sort of list.

Kara Swisher: Sure.

Dan Farber: Maggie Wilderotter.

Kara Swisher: Well, together I put John Chapel and Maggie Wilderotter. She's from Microsoft, and she's on the Board. She just came to the board relatively recently. And she's run major divisions of Microsoft, run her own company. If they're looking for a quick solution, they might turn to an experienced operating board member. John Chapel is -- came with Carl Icon. He was one of the handpicked choices of Carl Icon in the settlement of for the proxy fight.

Dan Farber: And he's from Nextel.

Kara Swisher: He ran Nextel. Again, another operations person. He's been wandering around Yahoo talking to executives, as I wrote today. So I think there might be -- you know, if they're looking for something quick and they feel pressure, they might turn to one of them. That's a very typical thing to do.

Dan Farber: Now, I know John Miller, formerly of AOL and now a venture capitalist, was mentioned early on as someone that...

Kara Swisher: Yeah, was gonna be on the Board.

Dan Farber: ...Icon was gonna propose for the Board.

Kara Swisher: Mm-hmm. He was until Time Warner nixed that because of a non-compete agreement. John's an interesting thing. There's issues around John, too, and Ross Levinson, who is his partner who ran MySpace and Fox Interactive Media. There's issues with everyone, obviously. But they certainly have the experience, as does Dan Rosensweig, who...

Dan Farber: Now, Dan Rosensweig was a former COO...

Kara Swisher: Former COO.

Dan Farber: ...of the company...

Kara Swisher: Right. Exactly.

Dan Farber: ...who left to join Quadrangle.

Kara Swisher: Exactly. You know, he was very well liked in the company. And you know, there were issues around his leadership, too, as there were with everyone. But he's very well liked. He's left the company. He's been more involved in media, and Quadrangle's a very -- very involved in the media.

Dan Farber: Plus, we worked together for many years, so.

Kara Swisher: Right. Exactly. Oh, that's right. He was your boss at one point. But he's -- that could be soft choice because it would be palatable to Yahoo people and easier, I think, in a lot of ways.

Dan Farber: And you mentioned Tim Armstrong...

Kara Swisher: Right.

Dan Farber: ...who is the top...

Kara Swisher: Mm-hmm.

Dan Farber: ...ad executive...

Kara Swisher: Revenue. Chief Revenues or whatever.

Dan Farber: Chief Revenue Officer, or something like that, at Google. Now, we've seen a lot of people from Google going to other companies...

Kara Swisher: Right.

Dan Farber: ...such as Sheryl Sandberg going to Facebook.

Kara Swisher: Right.

Dan Farber: Do you think that there's a possiblity...?

Kara Swisher: You know, Tim is the president of -- or chief whatever. He's -- I think he's probably not gonna be CEO. That was -- I mean he's obviously an ambitious man, and he wants to go places. And Larry Page is gonna be the CEO of Yahoo after -- I mean Google after Eric Schmidt, obviously. So -- or one of the founders, most likely Larry Page.

Dan Farber: Now you also put down Meg Whitman...

Kara Swisher: Mm-hmm. Just for fun. I mean everybody pulls her out because she did an excellent job at eBay. eBay's had troubles lately, but thought was natural. And she did build that company up. She is probably running for governor of California for the -- on the Republican ticket. Most people expect her to do that. She was very involved with the McCain campaign. You know, she doesn't want to do it, obviously. I just put her on there because she's always on these lists because she's sort of a go to person. There's others. I'm gonna do another list of more people soon. So there's, like, several others I had left out that are also very compelling choices.

Dan Farber: And do you think that there's a timetable they have in mind? I know they've hired Heidrick & Struggles to do the search.

Kara Swisher: Yes. These things tend to take three to six months depending, unless they have someone really in mind.

Dan Farber: That seems like a lifetime considering where Yahoo's at.

Kara Swisher: They can't wait. They can't wait. I think they've already settled on several people. It's just a question of getting them. Again, I think they would love to get Peter Chernin. It would be a huge pop to the stock. It would be an -- it would excite a lot of people, I think. And they shouldn't do a choice to excite people. They should decide what company they're gonna be. Are they gonna be a technology company? Are they gonna be a media company? Are they gonna be a -- if it's a turn around, do you need a different kind of executive?

Dan Farber: You know, I always thought...

Kara Swisher: Or are they gonna sell it?

Dan Farber: I always thought one of the challenges that Jerry had was he's not a really good salesperson.

Kara Swisher: Yep.

Dan Farber: And as a result, when you have troubled times, you're trying to discuss what you're strategy is, you really have to convince people. You have to almost spin them in the way a politician would. And he...

Kara Swisher: Yeah, he's -- you know, one of the quotes I used today was from someone inside, very high at the company, said, "Jerry's problem is he's really nice." And I thought that was kind of odd to say that because he really, truly is a kind, thoughtful -- a very good person. But he's not -- he's somewhat shy. He's -- he does get out there, but he's not -- he's a typical entrepreneur. Maybe he's not a typical CEO. And that was the problem.

Dan Farber: So is your -- part of your job description "someone who's not nice?"

Kara Swisher: Well, it sometimes helps in business, unfortunately. But I think someone who can make those drastic cuts, and without a problem. He took a long time to make cuts. He thought a lot. He was very thoughtful, and in this case it required someone to go in and really do some serious pruning of that company and really focus it. And I think when you create something -- you know, I use the expression -- it's kind of gross, but you can't kill your own baby. You know, you can't cut it. You can't change it. And Yahoo is his baby, along with David Filo, who is the other co-founder. And I think they have a very hard time -- as much as they say they're willing to change, I think it's tough. You know, you're -- you have to basically say what you had done before was wrong. And really great executives -- Bill Gates, if you recall at the time when the Internet switch, he switched. He just realized his -- he was in big trouble, and he switched. And it takes a certain kind of personality that maybe Jerry, for better or worse, doesn't have.

Dan Farber: Well, Kara. Thanks so much.

Kara Swisher: No problem.

Dan Farber: I've been speaking with Kara Swisher from All Things Digital. I'm Dan Farber. Thanks for watching.

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