Yahoo China Boss Quits after 2 Months

The Wall Street Journal is reporting this morning that Xie Wen, Yahoo China's Boss for less than 2 months, has quit.

It is likely the first sign of internal changes within Yahoo! overall since the 'Peanut Butter Manifesto' made its debut on Page One of the Journal. Yahoo China is of course now owned by Alibaba.com (although Yahoo! owns 40% of Alibaba since last year). At the very least, the departure of Mr. Xie signals internal disagreement within Alibaba. One analyst has speculated that there was disagreement internally about whether Yahoo China should focus more on search versus video and web communities. Yahoo China is trailing Baidu.com and Google badly.

Anytime a senior executive departs, it is a potential warning sign that there are troubles ahead. With Brad Garlinghouse's memo coming to light, this management shuffle at Yahoo China is under the microscope even more -- not so much for what it means for Yahoo!'s fortunes in China but whether it is a sign of other changes to come at Yahoo! overall.

Over 70% of Breakout Performance readers answering our recent poll said that Garlinghouse's leaked memo was a political move by him designed to raise his profile within and outside of Yahoo! (as opposed to being a sincere attempt to affect change in the company). Many are wondering if Garlinghouse or Terry Semel will go in the wake of the memo.

I am all for internal debate, but it's evident that having this spill out into the pages of the business press makes it difficult to keep with the status quo.

I recently suggested that it was time for Semel to go and that Susan Decker was the best choice to succeed him. Henry Blodget appears to be on board with this and claims others are in "universal agreement" with this assessment. However, one anonymous commenter to my post (and there was a similar one to Blodget's), who claims to be an ex-Yahoo! exec, disagreed saying that Decker "personifies the term 'analysis paralysis'". Another journalist complained that Decker had already made a major blunder earlier this year, when she suggested that Yahoo! can't win in search.

Can Yahoo! win in search? It is probably unrealistic, with the current approach. However, there are always new approaches. Whether the likes of Powerset or others can truly do a leapfrog remains to be seen, but that is the great thing about the technology world -- no lead, however daunting, is ever insurmoutable.

In the meantime, we'll keep watching for the next shoe to drop at Yahoo!...

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