At least Microsoft and Yahoo can agree on one thing. Noone wants the best brains to bolt (last week Bradley Horowitz, head of the company’s Advanced Development Division, left for Google, joining a brain drain that has been underway for some time - and yes, the A.D.D. acronym seems to have been a deliberate joke, to judge from Horowitz’s blog.)

This is what Jerry Yang had to say at the end of last week to Yahoo employees in an email that we’ve just got our hands on [note: the punctuation is all Jerry’s]:

i know the current environment can be unsettling. to ease your concerns, we’re putting in place a “change in control employee severance benefit plan” to ensure that all of you have financial protections in the event of a job loss if a change in control does take place. let me stress that this shouldn’t be construed as any indication that a change in control might or might not take place. it’s a way of protecting you and putting your minds at ease so you can all focus on creating value for yahoo!.

If you happen to be Microsoft this looks like a double-edged sword. If it stops top talent leaving, so well and good. But it also means that anyone you actually want to get rid of (and let’s face it, with more than $1bn in annual cost savings to be found there are bound to be a few) is going to cost. Will it keep employees focused on creating more value for Yahoo shareholders? Probably not - the best that investors can hope for now is a sweeter offer from Microsoft.

February 20th, 2008 in Digital media, Internet, Software | Permalink