Kara Swisher

Recent Posts by Kara Swisher

Semel's Movie-Making Expertise May Be Useful for a Makeover

This BoomTown column was first published in The Wall Street Journal on April 18, 2001. All rights reserved.

From: Kara Swisher

To: Terry Semel

Re: Some unsolicited advice on becoming the Chairman and CEO of Yahoo! Inc.

Terry, sweetheart, let me be the first to congratulate you on getting the green light on one of Silicon Valley’s most boffo projects.

Or as we say here, on deploying a major multi-platform operating system with a simplified user interface and innovative support services using a world-wide network that focuses on standards-based security, manageability and reliability.

Am I going too fast for you, Terry? Sorry, but that’s the way we operate on the Web–at warp speed a la “Star Trek,” if that helps you understand it better. I thought it might be helpful if I gave you the 411 on what you need to know if you want to put this baby in turnaround.

In fact, your movie-making expertise could save the day. It’s looking a lot like “Titanic” here recently–and I’m not talking about the DiCaprio version. (Quick hot thought: Can we get Leo to replace Jerry Yang as the Yahoo founder?)

First, the Trekkie image is a good one to visualize as you go into this, since the Internet is still too much about how the insides of computers, servers and devices that multi-task work (don’t ask). Your new company is full of bright young techies, all dressed alike in khakis, who like nothing better than to chatter about Linux, XML, WAP and SOAP (really, don’t ask).

That’s been fine, up to now, since the Web has been growing faster than the number of starlets hoping to date Russell Crowe. But presumably, Terry, you’ve been hired to change the entire focus of Yahoo, transforming it into the 21st century’s leading media and entertainment company.

Your first job, then, is probably a top-to-bottom overhaul, recasting the crew, the characters and even the whole story line.

Yahoo’s troops may resist, because the company is one that hasn’t changed a lot in its entire life–sort of like Norma Desmond in “Sunset Boulevard.” So as not to end up like the poor sap face down in the pool, you’ll have to evaluate quickly who can make the needed changes in style and focus.

While the old plot was a hit (ambitious youngsters take on grumpy older generation, make a king’s fortune and lose it all to hubris), it was so 1990s. Yahoo can no longer be about simple-living, burrito-eating geeks dedicated to making the Internet easier to use.

So you’re going to need an image makeover.

Are you aiming to be a Schwarzeneggerian media company like America Online Time Warner , delivering a mass of news and entertainment to tens of millions of subscribers? That may mean a quick marriage with a traditional media giant like Viacom or Sony to give you power and influence.

Or are you going to opt to be a classier outfit (think Miramax before Walt Disney) that cultivates a smaller but more dedicated audience with a top-notch bunch of services to help them manage information overload in this increasingly complex world? If so, you’ll need to figure out what products you have that customers will pay a lot for now.

Bringing in some money is obviously key, since you can ill afford any bombs at this point. Yahoo has been profitable for years, unlike almost every other Internet company, but it has primarily been an ad-based business. That’s box-office poison these days. What you need today is locked-in consumers, ownership of proprietary media assets and a dozen flavors of high-margin revenue.

Fail at that and you might as well take another cartoon to the big screen. Wall Street is now like a pack of dyspeptic critics, and their pans have taken a toll on Yahoo morale, its once-soaring stock price and, most important, its momentum.

But you can do Frank Capra and make the underdog role work for you. Yahoo can be the beleaguered George Bailey in “It’s a Wonderful Life”–the virtuous alternative for the masses of humble customers. Your major competitor, Bob Pittman at AOL, is the obvious person to play the Mr. Potter of the Web, greedily consolidating the medium.

Yahoo can’t depend on an angel to get it out of this jam, so go with what you have: lots of daily users, a killer database and a dedication to a high level of technological service.

While you’re not in Burbank anymore (Silicon Valley actually makes Burbank seem exciting), your Olympic ability to schmooze will allow you to attract the talent and build the relationships the company needs to be a sure-fire hit.

And if it doesn’t work out, you can always use that old Hollywood trick: Blame the previous studio head.

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Another gadget you don’t really need. Will not work once you get it home. New model out in 4 weeks. Battery life is too short to be of any use.

— From the fact sheet for a fake product entitled Useless Plasticbox 1.2 (an actual empty plastic box) placed in L.A.-area Best Buy stores by an artist called Plastic Jesus