AllThingsD » Leads

It's Official: Yahoo Lays Off 2,000 Employees -- 14 Percent of Workforce

Kara Swisher — Wed, 04 Apr 2012 13:22:13 +0000

In a move that AllThingsD had previously reported was coming, Yahoo said it had laid off 2,000 employees, or 14 percent of the workforce.

“Today’s actions are an important next step toward a bold, new Yahoo! — smaller, nimbler, more profitable and better equipped to innovate as fast as our customers and our industry require,” said Yahoo CEO Scott Thompson in a statement. “Unfortunately, reaching that goal requires the tough decision to eliminate positions.”

While Yahoo has had periodic layoffs over the years, this one is its most significant in its history, and will also result in another large-scale restructuring of the management organization. More cuts are also likely to follow in the months ahead, due to the reshaping of Yahoo.

The latest employee action is being pushed by Thompson, who joined the Silicon Valley Internet giant in January from eBay’s PayPal unit.

“Change is never easy,” he wrote in an internal email to Yahoo employees (it is below in its entirety), in a well-worn cliché I am dead certain few appreciated hearing today from the top leader.

At an internal meeting with top staff last night, Thompson — who has gotten what seems to be a well-deserved reputation for chewing folks out at Yahoo — was more direct with the execs gathered, berating them extensively for not delivering and getting the company to this sorry point.

Ouch, Scott! It’s Easter, so it might be time for some forgiveness. (And no more ranting about my reporting to those inside Yahoo, since I have been 100 percent accurate so far. FYI, will aim for 110 percent next week!)

Yahoo said it will save about $375 million with the cuts, incurring a $125 to $145 million pretax cash charge for employee severance in its second quarter. Before the cuts, Yahoo had 14,000 staffers and has many thousands more hired as contractors.

The layoffs touch all units of the company, but the hardest hit is the product division, which is headed by Blake Irving, as well as its marketing, research and international units. Yahoo gave no details on the layoffs other than the number.

But the fate of two key parts of the soon-to-be-blown-apart unit — Yahoo’s advertising technology businesses, Right Media and APT, and its search business — is still being contemplated, as I have previously reported. Possible scenarios include a sale or a joint venture transaction for both, which employ thousands of Yahoo staffers.

The layoffs tomorrow are not the end of the road in cutting costs. Along with the likely shedding of its ad tech and search businesses, Yahoo leadership is also looking at future cuts as it evaluates current businesses, which could lop even more employees off its roster.

That said, Yahoo will be doubling down in some older and new arenas, so there would also be simultaneous hiring in the months ahead.

As wrenching as they will be today at Yahoo, the layoffs come as no surprise. Thompson had told employees in memos and also in recent meetings that “real change” was coming to the company.

Along with the trauma of the layoffs, Yahoo is also facing two other tense face-offs externally. In one, activist shareholder Third Point is waging a proxy fight for board seats and stepped up the public pressure this week; and Facebook struck back hard at Yahoo’s patent lawsuit with a counterclaim of its own.

After the layoffs tomorrow, sources say Yahoo will be announcing a new organization by next week. Thompson, along with outside consultants he has hired from the Boston Consulting Group, are making what appear to be profound changes.

Sources said that Yahoo will most likely be comprised of a global media division, one that encompasses Yahoo’s consumer products businesses and one focused on global and regional sales. There could also be a small organization of about 50 employees aimed at future innovation.

Americas head Ross Levinsohn is pegged to run the media arm, which will also include its leads/commerce businesses, such as autos; Shashi Seth — who now heads search and marketplaces — is likely to run consumer products, which will include Yahoo’s communications and search businesses.

Yahoo has already been conducting a search for a new worldwide sales head, who will also be boss of the U.S., Asia and Europe, Middle East and Africa sales regions. Rich Riley, who was recently running EMEA, is reportedly the pick for U.S. sales; Rose Tsou, who is running Asia, would presumably stay put; Yahoo is looking for an EMEA sales lead.

Some current operational execs — such as service engineering and ops head David Dibble, CFO Tim Morse, and top lawyer Mike Callahan — are likely to continue to operate as before.

One big question mark is how Chief Product Officer Irving fits in the possible new org, in which the new units get control of their product development. Irving has reportedly had several incoming job offers, although it is not clear if he has responded to that interest.

But today, the focus is on the layoffs and letting go all those employees, many of whom have worked at Yahoo for years. Even if it will result in a stronger Yahoo, as Thompson promises, it is still a very sad day in Sunnyvale.

Here is a video on the topic that I did with the WSJ.com “Digits” show today, after the cuts were announced early this morning:

Here’s the entire terse statement from Yahoo:

Yahoo! Statement

SUNNYVALE, Calif. — (BUSINESS WIRE) — Yahoo! today confirmed that it is taking important next steps to reshape the company for the future.

“Today’s actions are an important next step toward a bold, new Yahoo! — smaller, nimbler, more profitable and better equipped to innovate as fast as our customers and our industry require. We are intensifying our efforts on our core businesses and redeploying resources to our most urgent priorities. Our goal is to get back to our core purpose — putting our users and advertisers first — and we are moving aggressively to achieve that goal,” said Scott Thompson, CEO of Yahoo!. “Unfortunately, reaching that goal requires the tough decision to eliminate positions. We deeply value our people and all they’ve contributed to Yahoo!.”

Yahoo! has a solid foundation — nearly 700 million users and thousands of advertisers that engage with Yahoo! properties regularly and trust the company with their data and their business. Through its restructuring efforts, Yahoo! intends to grow by responding more quickly to customer needs and competing more effectively in areas where it can win. Yahoo! has identified key parts of the business — a select group of core businesses, the platforms that support those core businesses, and the data that drives deep personalization for users and ROI for advertisers — where the company will intensify efforts and redeploy resources globally, all focused on increasing shareholder value. With a clear focus on profitability and growth, the company will be disciplined in its investments and radically simplify how it builds, launches and maintains many of its properties and products.

Today, the company will begin the process of informing employees about these changes. As part of that effort, approximately 2,000 people will be notified of job elimination or phased transition.

Yahoo! expects to realize approximately $375 million of annualized savings upon completion of all employee transitions. The company currently expects to recognize the majority of an estimated $125 to $145 million pretax cash charge relating to employee severance in its second quarter financial results. The company may incur additional charges in connection with this action. More information will be provided about Yahoo!’s future direction in conjunction with the release of its first quarter financial results on April 17, 2012.

And here is Thompson’s memo to employees, stating the obvious and with nothing new from previous statements and internal memos:

Yahoos –-

Today we are restructuring Yahoo! to give ourselves the opportunity to compete and win in our core business. The changes we’re announcing today will put our customers first, allow us to move fast, and to get stuff done. The outcome of these changes will be a smaller, nimbler, more profitable Yahoo! better equipped to innovate as fast as our customers and our industry require.

Over the last 60 days, we’ve fundamentally re-thought every part of our business and we will continue to actively consider all options that allow Yahoo! to put maximum effort where we can succeed. As part of this process, I believe we have to focus to win in a select group of core businesses globally:

Core Media and Communications: Our content, media, and communications experiences must be best in class. That includes getting today’s core properties right and innovating on a next generation of great product experiences across all screens.∙

Platforms: We must make our core platforms and systems a genuine strength for Yahoo! — platforms that we can really leverage to support our massive scale, drive the deepest personalization, and boost speed to market.∙

Data: Our massive data sets must become a genuine competitive advantage for Yahoo!. We have to unlock the value in our data to allow us to really understand our 700 million users, encourage and win their engagement and trust, leverage everything they do with us to more fully personalize their experiences, and to give our advertisers the immediate insights they are rightfully demanding.

We are intensifying our efforts on our core businesses and redeploying resources to our most urgent priorities. Our goal is to get back to our core purpose — putting our users and advertisers first -– and we are moving aggressively to achieve that goal.

Unfortunately, reaching that goal requires the tough decision to eliminate jobs, which means losing colleagues and parting with friends. Today, we will begin the process of informing employees about these changes. As part of that effort, approximately 2,000 people will be notified of job elimination or a phased transition. We value our people and for those who will be leaving, we thank you for all you have contributed to Yahoo!. We will treat all of our people with dignity and respect, providing resources to help manage through their transition.

Change is never easy. But the time has come to move Yahoo! forward aggressively with increased focus and accountability. Our values have always been about treating all Yahoos with dignity and respect, and today is a day to embrace those values. This is an amazing company with exceptionally talented people and I know we will all do our best to encourage each other through this difficult period of transition.

Scott

FindTheBest's Kevin O'Connor Talks About Comparison Engine, Now Running Hot on $6M in Funding (Video)

Kara Swisher — Thu, 28 Jul 2011 16:15:03 +0000

Last week, after FindTheBest nabbed $6 million in funding from Silicon Valley’s Kleiner Perkins, veteran entrepreneur Kevin O’Connor talked to me about the content platform, which structures data into a hopped-up comparison service for products and services.

Comparing, organizing and filtering everything from summer camps to mountain bikes to investment advisors to Hollywood agents, it’s a leads business for “considered decisions,” with added hopes of selling its technology to anyone in need of a human- and machine-powered curation engine.

The new venture funding for the Santa Barbara, Calif., company comes after a small seed round of $750,000 from O’Connor, who founded online advertising pioneer DoubleClick and others.

Here’s a screenshot of the service, which could take almost any topical direction, as well as the video of my interview with O’Connor:

[ See post to watch video ]

Man Bites Dog! Web Publisher Pays Writers

Peter Kafka — Sun, 16 Jan 2011 14:00:01 +0000

It’s a time-honored Web tradition: Build a business by getting people to give you interesting content to publish, for free. And it’s still a very popular one. See: Facebook, Twitter, Huffington Post, Quora, etc.

Which is why this qualifies as news: Financial commentary site Seeking Alpha is going to start paying some of its writers.

The seven-year-old site, which relies on a pool of several thousand contributors to stock it with chatter about stocks and anything else you can trade, will now offer them a chance to get paid for their work. It’s a one-size-fits-all rate: $10 for every 1,000 page views a story generates, as long as the story doesn’t appear anywhere else on the free Web.

That’s not going to make any of the site’s writers rich. Seeking Alpha CEO David Jackson says “it’s possible” that his most popular writers could generate a couple of thousand dollars per month, but most are going to make much less.

Jackson, on the other hand, is potentially on the hook for a decent-size bill.

Quantcast pegs his site’s daily page views at around two million. Not all of those views come from contributors–Seeking Alpha’s free transcript service, for instance, is popular and useful, and I assume the site gets a decent chunk of direct traffic. But if, say, half its page views were from volunteers who now want to get paid, that’s an outlay of $1,000 a day.

But why pay anything at all? Jackson’s longtime strategy has been to get people like newsletter publishers and money managers to give him free stuff, and offer them exposure/leads in return. Why change now?

You can read Jackson’s explanation of the move, along with some other details, in a letter he’s distributing to his writers today. But maybe he’s just following this sound advice from the Joker:

Dear Seeking Alpha contributor,

I wanted to let you know personally about three new initiatives that have rolled out on SeekingAlpha.com this morning:

1. Sharing revenue with contributors

I’ve always viewed Seeking Alpha as a partnership with our contributors: you provide us with outstanding articles, and we invest heavily (we now have over 70 employees) in technology, web design, editors and traffic partnerships to get your ideas in front of a large and valuable audience and drive customer leads to your business. But we’ve always known that some of our contributors don’t have businesses we can drive leads to, and that many contributors would appreciate additional direct income from their articles.

We’ve spent over a year building a direct sales team, and our readership has hit an all-time high and continues to grow (see: http://www.quantcast.com/seekingalpha.com). As a result, we can now share meaningful revenue with contributors: you’ll earn $10 for every thousand page views to articles which are published by Seeking Alpha and given to us exclusively (i.e. they don’t appear for free elsewhere on the Web). We call payment for exclusive articles our “Premium Partnership Program”. It’s on an article by article basis, so there are no contracts or forward commitments, and if for any reason you don’t want to receive payment yourself, you can pick a charity to receive your earnings instead. And if you don’t want to give us exclusivity for articles, nothing will change from the way we publish your articles now.

2. Upgrade to our leaderboards and reputation system

We’ve introduced a new reputation system and set of leaderboards, called “SA Opinion Leaders”. You’re now ranked by page views (trailing 90 days) to your articles according to the themes you write about. For example, if some of your articles are tagged “Media”, you automatically appear in the Media Sector leaderboard and are ranked by the number of page views you received to those articles. You can appear in multiple leaderboards, determined by the themes your articles are tagged with. Additionally, if you’re ranked in the top 5 for any theme, that information is displayed on your articles and also on your profile page.

We think this new reputation system has strong advantages. First, we’ve discovered that the number of followers a person has on Seeking Alpha (and, parenthetically, Twitter also,) doesn’t necessarily equate to reader engagement or influence. In contrast, the number of people who read your articles is a direct measure of reader engagement and thus your influence. Second, reputation is far more meaningful when measured in specific areas of expertise. So if you focus on media stocks, it’s far more valuable to know (and tell people) that you’re the number one on Seeking Alpha in the Media Sector than that you’re number 33 in some general ranking. We think that measuring real engagement and ranking contributors in categories will be valuable for contributors and — critically — valuable for readers.

3. Access to stats

You can now view detailed stats on Seeking Alpha, including total page views, page views by article, and page views by category. Additionally, you can track your page views and earnings for exclusive articles.

The future

Any major change carries risk, so why are we doing this? After all, churn in our contributor base is remarkably low, we’re about to add our 4,000th contributor, traffic is at an all time high, we recently crossed our 600,000th registered user, we have over 40,000 comments on the site per month, and our audience is of outstandingly high quality.

The answer is: this is about a vision. Investment research has been dominated by the sell side, but there’s a world out there of other people who have considerable knowledge and insight about stocks, options, bonds, ETFs and investment strategy. Whether you’re a fund manager, financial advisor, industry expert or a smart individual investor, we want to be the partner that brings that insight to light and unlocks value for contributors by offering exposure, reputation, customer leads and direct income. If this is successful, it should transform the investment research industry.

Thank you for your partnership with us, and wishing you a happy and prosperous 2011,
David

Another Twitter Business That Doesn't Make Money for Twitter: Pay Per Twitterer

Peter Kafka — Wed, 17 Jun 2009 10:00:12 +0000

One day I’ll get to stop writing this, because Twitter is slowly starting to sketch out some revenue plans.

But for now, it still holds true: Almost all of the money Twitter is generating is being generated by companies other than Twitter. They’re members of the growing ecosystem of companies that base their business on the microblogging service, but don’t pay Twitter a dime.

Here’s another one: Pontiflex, a lead-generation start-up that hoovers up names and other info from users who visit its network of publishers and then sells the data to marketers. The Brooklyn-based company is rolling out a Twitter product that lets marketers compile a list of interested Twitter users.

Sound simple? It is. All Pontiflex is doing is adding a Twitter “handle” field to its lead-generation forms (see example at right). Armed with these data, a marketer can follow Twitterers who say they’re interested in their products, and…not much else.

Since the users aren’t actually signing up to “follow” any of the marketers, said marketers can’t send them direct messages. The marketers could try to “at reply” their leads–the equivalent of shouting out the name of someone you think might be at a loud cocktail party but can’t actually see. But that’s about it.

So what’s that information worth? Depends, says Pontiflex CEO Zephrin Lasker. Probably more than an email address, but less than a phone number. He says pricing will depend on clients, volume, etc., but he figures he’ll be able to sell each Twitter handle to his consumer packaged goods clients for a couple bucks a pop. Call it anywhere from 50 cents to $5 per name.

Per usual, Twitter won’t see a penny of that.

Like most other Twitter ecosystem ideas, this one only works if Twitter really crosses over from novelty to mainstream and stays there. And the jury’s still out on that.

But in the meantime, marketers want in on the new hotness, and Lasker is happy to oblige.

“This is one of those things that people don’t know how to participate in, but they want to be there,” he says. “So, that’s where we can help.”

Also, just because we’re talking about leads, and I use any excuse I can get, here’s Alec Baldwin’s awesome “Always Be Closing” speech from “Glengarry Glen Ross.” (Warning! Contains salty sales language.)