AOL and Yahoo! are run very differently from Microsoft and Google

It’s a matter of class.

Apple and Google have traveled different paths on their road to success. Both have overcome challenges that could have tanked most tech companies in their early (Google) and middle (Apple) days as companies. Both have had strong leadership – Steve Jobs at Apple and most of the executive team at Google – that has kept them on course despite the challenges.

Both make good decisions and bad decisions, but it is in adversity that the the true heart of the companies come out. For Apple, they were on the edge of the abyss when they swallowed their pride and brought back Steve Jobs a few years after ousting him and let him lead the company to be the most valuable tech firm in the world. When it became clear that health would take Jobs away from his duties sooner than they would have liked, they prepared. Today, with Steve Jobs out as CEO, the prospects of the company are still high.

Google faced a different sort of adversity – failure. They were, for the most part, a one-trick pony. Sure, they have always had innovative products and services, but the vast majority of what they built or bought failed. Yet, they kept trying. They still haven’t given up on social media as they believe it’s the future. With Google+, they may have finally taken the big step in the right direction that they have missed a dozen other times in the past.

Now, let’s look at AOL and Yahoo. Today, Yahoo announced a leadership reorganization that included ousting CEO Carol Bartz. This is not a shocker – the company has been struggling with just about everything over the last 4 years since just before she started. What is surprising is very subtle, not really newsworthy, and all-too commonplace in today’s tech environment.

It’s also indicative of the types of mistakes that Yahoo has made over the years.

They fired her via telephone. There was no warning. No face-to-face interaction. There was no plan on how she was going to handle the situation nor how they would position it in the media other than the factual press release that stated the whats and whens.

Again, it’s not uncommon anymore, but it yields stories like this one about Bartz confirming over an iPad. It is these little nuances and missteps that have taken Yahoo from being on top of the internet less than a decade ago to fighting for their profitable lives today.  What should have happened is this:

1. First, they have a meeting with Bartz to discuss the decision, allowing an opportunity attached to a nice severance package for her to bow out with her head held high. By stepping down in order to “promote progress and the amazing initiatives that Yahoo has planned” the company would have avoided the perception of a ship falling apart.
2. Then, they start the search for a new CEO quietly. There aren’t a ton of candidates to consider for a position as high as CEO of Yahoo. Beginning the search after her firing is ludicrous.
3. They do it all on a Friday when the news will have less of an impact. That’s “Leadership Shakeup 101”, particularly in a Twitterized media environment.

Instead, they fired her over the phone and let her send out a broadcast confirmation email saying that she’d just been fired unexpectedly. Poor, poor planning. The thought process behind it is clear – they wanted an immediate message sent out. Shareholders will get a boost from the news as it’s a clear statement that the company has hit rock-bottom and is ready to rebound. Long-term, however, it will prove to be a mistake to use an old “quick action” technique.

For AOL, the situation is even worse. They have a CEO that possibly should be fired after the Techcrunch/CrunchFund debacle. As with Yahoo, AOL seems to not be in control of their own leaders’ actions and cannot formulate a plan that spans longer than a few hours before getting botched.

It’s these types of decisions that separate the strong companies from the weak. Yahoo and AOL were both pioneers in their respective arenas and held their own fates in their hands. They were on top of the world and needed only a good plan, some foresight, and strong leadership to continue to dominate. Both lost their ways.

Google and Apple, on the other hand, have the ability to recover from their mistakes. In many cases, their “mistakes” turn out to be beneficial (lest we forget that the iPad was reviewed very poorly by most tech blogs before its record-setting public release). It isn’t that they make fewer mistakes. It’s that they react properly when mistakes are made. Everything from leadership changes to shifts in products and services are carefully thought-out and executed properly in ways that make the companies look like they’re on top of their own companies.

For AOL and Yahoo, it seems that most moves they make are poor, but more importantly the mistakes they make turn bigger than they have to be. We won’t see either company around in their current level of influence within 2 years.