Misfortune, like spam on the internet, has been chasing Yahoo!, one of the world’s largest internet companies. It would be facile to suggest that the virus affecting the company originates from the decision of Jerry Yang to become the chief executive of the firm. Earlier, Mr Yang and his friend, David Flo, had assumed the title of “chief Yahoos”. It did not take too long for both of them to realize that survival in the highly competitive internet space could not depend on fun and weird titles. It demanded hard-nosed business decisions. This is perhaps where Mr Yang floundered. In February this year, Microsoft made a bid to buy Yahoo! at $33 a share. It was an offer which could have rescued Yahoo!, but Mr Yang turned it down on the ground that the price was too low. Yahoo!’s share price is now at $12. What is worse is that Mr Yang, when he rejected Microsoft’s offer, had no other rescue-plan in mind. Yahoo! thus started its journey on the slope of decline.

On his assuming the title of CEO, Mr Yang had taken the rather unusual step of inviting Terry Semel, a Hollywood tycoon, to run Yahoo! and turn it into a media company. There was a rival called Google hovering in the wings, and the powers that be in Yahoo! missed the importance of the entry of Google. The irony was that the founders of Yahoo! had helped the founders of Google to start up, since the four of them had been up at Stanford together. Google radically changed the web game with a simple search box as the starting point. Google’s approach to advertisements was also different as any user of the site will discover. Yahoo! became a laggard once Google had entered the computer screen. The gap, once initiated, never closed despite Yahoo!’s best efforts. If all this was not enough, internal squabbles and rivalries soon broke out within the company: executives quit, morale was low and innovations shelved. Mr Yang seemed to have lost his touch, and he even found himself before Congress, testifying to the information he had passed on that had led to the imprisonment of two Chinese dissidents.

Just prior to his announcement that he was stepping down as the CEO, Mr Yang declared that he wanted Yahoo! to emerge as a “platform company”. This is a pointer that yesterday’s pioneer is today a tired man incapable of coming up with novel ideas. A whole train of internet companies — Microsoft, Google, Facebook, Amazon and so on — has had similar ideas and aspires to become platforms. How is Yahoo! going to be different? Or even if Yahoo! does become a platform, what is the guarantee, given its recent poor track-record on innovations, that it will succeed and pull itself out of the rut? Under the present circumstances, it is certainly not going to get any help from the external environment. Mr Yang’s decision to step down could not have come a moment too soon. It is time a new person brought new ideas into an old portal.