Yahoo! Inc. (NASDAQ:YHOO) Takes Hard Decisions

Posted by admin January 17, 2014 0 Comment 965 views

Now that the news of the surprise axing of Yahoo! Inc. (NASDAQ:YHOO) Chief Operating Officer has had time to settle in, the analyst community and the media have got down to conducting a post-mortem on what led to the public sacking of Mr Henrique de Castro, who was incidentally handpicked by Yahoo! Inc. (NASDAQ:YHOO) CEO Marissa Mayer just 15 months back. It is noteworthy to remember that both Marissa Mayer and Henrique de Castro had crossed paths at their previous employer Google Inc (NASDAQ:GOOG) where Mr Castro was credited with managing a profitable display ad business.

Right Person For Wrong Job

Irrespective of the background to Mr Castro’s taking up the high paying job of COO at Yahoo! Inc. (NASDAQ:YHOO) , it soon became obvious to company insiders including Marissa Mayer’s  that the specialized role and the leader occupying it were not lined up correctly. The ad revenue over the past four quarters for the Sunnyvale based tech major continued to stagnate in spite of huge impetus provided by the top management to beef up the “takeover display ad” space that the company operates in. The Yahoo ad space sales force is more than 1000 strong and in hindsight company insiders have revealed that Mr Castro displayed “complete lack of experience whatsoever in running any kind of a real ad sales force, let alone a 1,000+ team selling experiential media into brand buyers.”

Cutting Her Losses Short

Realizing that she had blundered in bring on board Henrique de Castro at an astronomical cost              (rumoured to be $110 million), Ms Mayer decided to cut her losses by getting rid of her COO. She is quoted to have explained her bold decision in an email to her employees that, “During my own reflection, I made the difficult decision that our COO, Henrique de Castro, should leave the company.”

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