Yahoo Used To Be Good At Acquisitions, Says Old-Timer

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In a series of emails responding to our post “Yahoo’s Entire, Sorry Acquisition History,” a former executive at the company says Yahoo made some smart acquisitions during its early days:

  • ClassicGames, which cost $1M and became Yahoo! Games. Probably the single best ROI on an acquisition Y! ever made.
  • ViaWeb, which became Y! stores.
  • WebCal, which became Y! calendar.
  • Four11, which became Y! Mail — Yahoo’s most dominant property.

We asked this former exec — who, by the way, doesn’t want us to use his name because “I’ve pissed off enough people” — why Yahoo used to be able to make a deal and properly integrate a startup, but doesn’t seem to be able to anymore. See delicious and Right Media, for examples.

His answer is that Yahoo used to be better at intergrating startups because it was a startup itself:

“In the old days decisions were made by people, not committees. When I started at Y! the boast was how lean you could run. I can launch the property with a PM, an engineer and a UI, guy and we can do it in 6 weeks. Once it’s up and running we’ll need half of a PM and 10 hours a week of engineering. When I left Y!, the boast was how many head count reported to you.”

The good news is that while Yahoo can never be a startup again, we think Yahoo’s action-oriented CEO Carol Bartz is already helping the company learn to make hard decisions again.

We say this because:

  • Carol is reportedly taking talks with Microsoft seriously, negotiating in a much more direct manner than her predecessor.
  • She’s cut services like Geocities and Jumpcut and is reportedly looking to ship Yahoo! Personals to Match.com.
  • She’ll cut headcount when she has to.
  • She’s dispensed with former president Sue Decker’s labrynthian management structures.
  • She drops F-bombs.

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