In October 2006, Yahoo SVP Brad Garlinghouse wrote a blistering internal memo, urging the company to narrow its focus and clarify its vision.
The memo, now famously called the “Peanut Butter Manifesto,” pointed out Yahoo’s lack of focus, using peanut butter as a metaphor for spreading its resources too thinly.
It laid out all the problems Yahoo was facing, and served as a wake-up call to a company that was losing its place to up-and-coming rivals, such as Google.
“I’ve heard our strategy described as spreading peanut butter across the myriad opportunities that continue to evolve in the online world. The result: a thin layer of investment spread across everything we do and thus we focus on nothing in particular,” Garlinghouse wrote. “I hate peanut butter. We all should.”
Fast forward 10 years, and Garlinghouse’s words still seem to hold true for Yahoo’s ailing business: lack of clarity and decisiveness, leading to a seemingly perennially dysfunctional group. Although Yahoo CEO Marissa Mayer has been making a stronger push towards mobile, video, and social, it’s still hard to sum up Yahoo’s business in a single word, the way you’d identify Google with “search” or PayPal with “payments.”
“What’s most remarkable is how little has changed from 10 years ago, and how much of what’s in the ‘Peanut Butter Manifesto’ is still shockingly true,” Garlinghouse told Business Insider.
Garlinghouse left Yahoo in 2008, and is now President and COO of payments startup Ripple Labs. So he’s not as plugged in to the company as he used to be, but he’s not sure if Yahoo’s current management will be able to fix the problem.
He believes the renewed energy that once attracted a lot of talent in Mayer’s early days is gone now, and the micro-managing culture continues to deteriorate the employees’ passion.
“I was quite bullish and hopeful when Marissa first came in,” he said. “But it seems to me that Marissa’s created an environment where she doesn’t trust and empower even some of her most senior leaders, and you’ve seen those people leave over time.”
For what it’s worth, Yahoo announced a new plan last week, which will cut 15% of its workforce and close 5 overseas offices. It will also shut down some of its old products, like Yahoo Games and Smart TV, and concentrate on its mobile initiatives instead. In the meantime, Yahoo will explore “strategic alternatives,” including a possible sale of its core internet business.
Despite all the changes, Yahoo still seems to be grappling with direction, and once again, there’s uncertainty looming over the company. But Garlinghouse still has a soft spot for Yahoo in his heart, and he’s hoping for the company’s comeback.
“The Yahoo alumni group is a group of people who are absolutely passionate about their time at Yahoo. I think everybody’s rooting for them,” he said.
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