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Yahoo's firing policy is good for stockholders, but is it bad for business?
Marissa Mayer plays hardball with people leaving Yahoo.
If a top executive wants to quit, Mayer does not do them the favor of paying them a big severance package to leave.
She waits for them to quit on their own.
That's what happened to former Yahoo ad boss Michael Barrett.
In a similar vein, when Mayer wants to replace someone, she does it fast – often hiring the replacement first, and firing second.
That's what happened to former CMO Mollie Spillman and CFO Tim Morse.
This kind of decisiveness is smart, and certainly shareholders appreciate Mayer's dedication to frugality.
But there is one kind of executive Mayer needs to be careful with: the ones who come into the company through acquisition.
Last year, Yahoo bought an ad tech company called Interclick for $270 million.
The reason to be careful is that Yahoo already has a poor reputation among tech industry entrepreneurs.
Over the past years, Yahoo has had a very hard time convincing them to join the company.
Two quick examples are Foursquare CEO Dennis Crowley and Groupon CEO Andrew Mason, who turned down buyout offers from Yahoo (and personal riches to last generations) simply because they thought it would be a terrible place to work.
The fact that Mayer now runs the company has helped Yahoo somewhat in this regard. She has a better reputation in the startup community than former Yahoo CEO Carol Bartz could have dreamed of.
But if it gets out that Yahoo treats the founders of the companies it acquires poorly, that progress may reverse, and Yahoo may have an even harder time bringing talent into the company through acquisition.
Short-term frugality is smart – but long-term greed is smarter.
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