Trouble for Yahoo in India

Posted by: Bruce Einhorn on August 7, 2007

Out goes another Yahoo exec in Asia. Last November, it was the head of Yahoo China who left after only 42 days at the helm. (See this BusinessWeek story for more on that.) Now Yahoo has woes in India. Having been on the job for just a year and a half, Yahoo India managing director George Zacharias has now quit the company. According to news reports, he’s left “to pursue his own entrepreneurial interests.”

What’s going on? Zacharias of course praises Yahoo India’s “well-oiled and strong leadership team” and says that the decision to leave was “a tough one.” Maybe. But the timing does certainly raise questions about whether Zacharias and Yahoo management back in the U.S. didn’t see eye to eye on where the company should be going in India. It was less than a month ago, for instance, that Zacharias appeared before reporters to announce Yahoo India’s investment (for an undisclosed sum) in Tyroo, an online advertising agency. At the time, he said that Yahoo was expecting ad revenue in India to double this year.

Sounds impressive, but as Nikhi Pahwa (editor of the Indian website contentSutra) pointed out here on July 19, “[t]his is interesting (and a little bearish) in the context of growth in Internet advertising in India—Zenith Optimedia estimates that online advertising in India just around doubled last year…and it is expected to increase by more than double this year.” So Zacharias was just predicting that Yahoo would keep pace with the market. With Yahoo struggling in the U.S. to compete with Google, and with India one market where growth is just now taking off, maybe Jerry Yang is looking for something a bit better from the Indian operation.

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