A fire drill couldn't clean out Yahoo's executive suites sooner

SCOTT FULTON, BetaNews: Essentially, the blogosphere spin is that employees were so down on Yahoo finally making the deal with Google, that that was the last straw. But I'm wondering if that's a smokescreen -- or rather, the blogs blowing so much of their own smoke that they can't see through it. Because let's face it, Yahoo and Google had made deals before and no one threw a bonfire over it.

And I also refuse to believe it's because these guys so, so wanted to be owned by Microsoft, even though the board was so dead-set against it. No, there's something deeper in the works here. I think they know where the leak in the sinking ship is really coming from, and it's not the Google deal. My fear is that it has to do with the executive severence bonus plan, which is certain to come up as a key topic in the August shareholder meeting. It was the plan that essentially let executives cash out with huge bonuses in the event of a takeover from someone else, and all the e-mail shows that executives were hot on that idea expressly because it provided an obstacle to Microsoft.

In your opinion, Carmi, could there be something deeper in the accounting of this company that's driving these folks away? Or is it really what the blog-o-square thinks it is, a bunch of generally unhappy folks who aren't seeing their options values rising, and who are deciding, this sucks, let's blow this joint and go home?

AR Communications Senior Vice President Carmi Levy

CARMI LEVY, Senior Vice President, AR Communications: At the end of the day, people make decisions based on their own financial self-interest. Executives and employees who think they're better off staying with Yahoo will stay, while those who think Yahoo has flatlined are leaving. The poison pill defence that Yahoo implemented as part of its efforts to fend off Microsoft could very well be making it easier for executives to be heading for the door. It is difficult to unwrap the true reasoning, however, because human resources issues are typically subject to fairly restrictive privacy constraints.

If Yahoo's accountants did indeed work their magic to give executives golden parachutes, it'll all come out if this company is ever investigated for its conduct leading up to and during the Microsoft courtship. There are enough questions left hanging that employees, shareholders and other stakeholders will be demanding someone's head for some time to come. The ensuing lawsuits and probes will shed light on what may or may not have been put in place to keep executives firmly onside as senior leadership positioned itself to fight off the Microsoft bid.

Waves of departure tend to take on a life of their own at some point, and given the reputational aspects of being associated with what is now perceived by everyone as yesterday's company, the prospect of a large exit bonus might be the straw that breaks the camel's back for many of the currently-departing executives.

I think the employees might have been subject to an intensive internal marketing campaign that aimed to convince them that Microsoft was the devil incarnate and needed to be battled at all costs. I think the more intelligent employees looked at it from a financial and career management perspective and chose to ignore the marketing messages being tossed at them from both sides.