Daily Archives: September 8, 2009

Garlinghouse’s New Employer Resembles Former Corporate Home

Brad Garlinghouse, former Yahoo senior vice president and author of the “Peanut Butter Manifesto,” has taken a job at AOL.

He will serve as president of Internet and mobile communications at AOL. As the New York Times explains, Garlinghouse also will head AOL’s Silicon Valley operations, which will be expanded, and lead the West Coast arm of AOL Ventures, a unit in charge of investing in start-ups and spinning off businesses.

It’s a bigger remit than the one he owned at Yahoo, but the two companies are similar in many respects. His role at AOL covers some of the same operational ground he oversaw at Yahoo.

In his Peanut Butter Manifesto, which was leaked to the Wall Street Journal back in late 2006 and was circulated widely inside and outside Yahoo, Garlinghouse argued that his former company was spread too broadly and not sufficiently focused to achieve meaningful business success. There was truth to that argument, and much else that Garlinghouse had to say about the dysfunction and institutional paralysis within his former employer.

Now, though, he’s joining another Internet portal. When one looks at AOL, whether at its front door (www.aol.com) or at any of the properties that lie behind it, one sees a company that is similar in many respects to Yahoo. If one were compelled to identify a primary competitor to AOL, or a company that AOL most resembles, Yahoo would be at the top of the list.

Focus will be essential to AOL’s success. It needs to select areas where it can win, against Yahoo and against others, and then execute effectively and precisely. Despite the changes at Yahoo since he left, Garlinghouse knows his former companies strengths and weaknesses and presumably is uniquely qualified to position his new company for competitive advantage against his former employer.

Having performed admirably and candidly as internal critic and corporate dissident at Yahoo, Garlinghouse now finds himself in a role where he will be given a full opportunity to put his ideas into practice.

That won’t be easy. AOL’s parent, Time Warner, has grown impatient, and it would like to divest itself of its Internet sibling at the earliest possible opportunity. AOL is a brand that has been in chronic decline, losing market share steadily. It has a few properties that are performing well, it has been given a new strategic mandate, but it still appears to be a hodgepodge of services rather than a coherent whole.

Still, Garlinghouse must have relished the opportunity to do at AOL what he believes should have been done at Yahoo. Apparently he passed on other job offers to set up shop at AOL West.