Kara Swisher

Recent Posts by Kara Swisher

Retaining Yahoo Talent: Enhanced Severance?

Is it just me or does it feel like the air is slowly seeping out of the energetic balloon blown up by Microsoft’s bold and quite unsolicited bid to acquire Yahoo?

Of course, just by bidding a few dollars more or not or walking away even, the software giant could sass things up a bit, as could an actual Yahoo alternative to what most agree will be its ultimate fate: Becoming Microsoft’s Silicon Valley satellite office, anti-Google division.


This kind of slowing down the pace to approximate the mood generated by those two Slowsky turtles who flack for Comcast is, of course, vintage Yahoo, which likes to take its sweet time doing pretty much everything of late.

But one problem with the drag-dragginess is that key talent continues to drift out of the company–witness the recent departure of Bradley Horowitz, who played the role of the entrepreneur’s best friend at Yahoo well.

While Horowitz is high-profile, I can tell you by the emails I am getting daily from Yahoos that a lot of them are contemplating the door.

That’s why, sources tell BoomTown, that Yahoo is preparing to hand out attractive retention packages for key talent, in order to hold onto them through this process, which would be especially important if Yahoo (YHOO) escapes Microsoft’s (MSFT) embrace.

It’s a prudent idea, of course, given Yahoo has to work hard to keep its current business going with all the takeover distractions surrounding it.

But, more interesting, sources said Yahoo’s plans also include even more juicy severance deals upon a change in control that would give some employees a nice cushion on the way out, either via Microsoft cuts or on their own volition. (Yahoo, by the way, said last week it would incur up to $25 million in charges related to its recent layoffs.)

In fact, upping the severance for current employees is exactly what Dow Jones (owner of this site) did right before the News Corp. (NWS) bid was accepted, handing over enhanced severance packages to 160 senior managers, in the event they were forced out after an acquisition.

In its government filings in June of 2007, Dow Jones said it did so because it “intended to enhance the company’s ability to retain and attract management-level employees.”

At the time, although Dow Jones said such a move was unrelated to any sale, many saw that move as a sign that it was getting ready for it. And, in fact, the company reached an agreement to be sold within 30 days.

So, even at a turtle’s pace, it might be a good idea, in Yahoo’s case, to follow the money.