We heard plenty of rumours to the contrary, but we can now report Yahoo is not planning on selling its Right Media ad exchange.
But even as Yahoo depends on the ad exchange to help it stave off Google (GOOG) in display advertising, some of the division’s top talent is eying the door anyway.
A source familiar with the situation tells us that Yahoo CEO Carol Bartz is “doubling down” on the business after taking a closer look over the summer. Apparently, it’s “kicking arse.”
Unfortunately for Yahoo (YHOO), this new enthusiasm isn’t keeping top talent from fleeing the company.
For example, respected Right Media VP Anthony Taylor is on his way out the door, multiple sources tell us. We don’t know where he’s going next, but we’re told to expect something entrepreneurial.
It’s a loss for Yahoo. Sources close to the company say Ant, as he’s known, has “contributed significant value to [Yahoo’s Right Media] business.”
“[Ant] will end up being one of the top talents in the industry.”
Ant is quitting mostly because its been long enough since Yahoo acquired Right Media, that his options have vested and it no longer makes financial sense for him to stay with the company.
One source close to Yahoo tells us not to overreact to Ant’s departure, telling us that there are “Lot of aggressive young talent” in the division who are happy to fill in the ranks.
“[Ant] recruited top talent that’s just going to move up in the org.”
But Ant’s case does typify a wider problem for Yahoo (and Google, too, actually): How can it retain the talented people it brings in through acquisitions after their options vest?
Here’s how one source described the problem:
“When you acquire these companies, especially a small company for a lot of money, cliffs are created. If there’s not financial incentive for [these people[ to stay, when you hit that cliff [they are] gone. It’s not that [they] don’t believe in the vision. It just doesn’t make finaincal sense to say. How do you prevent mediocrity from rising to the top?”
For an example of how not to handle the problem, look to former Right Media CEO Mike Walrath, who moved from New York to Sunnyvale last year.
After accomplishing the impressive feat of selling a startup for $680 million, he’s now running “a department of one doing nothing.” The guy helped create a company that will change the way online advertising is sold forever. Considered an industry visionary, he should be doing something strategic for Yahoo.
When his options’ vest in a few quarters and there’s no compelling financial reason for him to stay at Yahoo, why would he? We expect him to go, along with a bunch of other top Right Media execs, too.
Maybe that’s just the way of things, says one source. “[Yahoo and Google and the others] need these people to go out and innovate the next thing — build a company. Then [Yahoo can] acquire it for a couple hundred million dollars.”