By Alexandra Berzon
Yahoo’s top music executives have resigned, a company spokesperson confirmed Wednesday.
David Goldberg and Robert Roback, who served as both vice presidents and general managers of Yahoo Music, had been with the company since Yahoo bought their product, Launch Media, in 2001. They issued their resignations on Monday from a company weathering a topsy-turvy struggle to keep pace with rival Google.
In the past year, Mr. Goldberg had become a prominent spokesperson in the battle with record labels to relax digital rights management, the technology that record companies use to block music consumers from playing a song on multiple devices. His position is one that Apple’s Steve Jobs recently made headlines by endorsing.
Mr. Goldberg and Mr. Roback will leave the company in April, with Entertainment and Games division head Vince Broady taking over the music unit, Yahoo Music representative Carrie Davis said.
In separate statements, the two indicated that they were resigning to return to their “entrepreneurial roots” and start a new business together. Ms. Davis added that Mr. Goldberg had said he wanted to stop commuting back and forth between the company’s offices in Los Angeles and Northern California, where his family lives.
Northern CaliforniaBut those explanations didn’t stop media watchers from speculating on the causes and implications of yet another shift in the ranks at the troubled Internet giant.
“This points to the continuing frustration with the operating structure of a company that has become overly bureaucratic,” said Wall Street analyst Tim Boyd of Caris & Co. “Hopefully, this is going to be among the last of these examples of people leaving.”
Yahoo has weathered a turmoil-filled last year, with executives complaining loudly of a disorganized structure that led it to try to be too many things to too many people. In December, Yahoo announced a reorganization plan that was supposed to help it stay focused. Numerous other executives have resigned recently, including Chief Operating Officer Dan Rosenweig and media head Lloyd Braun.
The departures of Messrs. Goldberg and Roback also raise questions about the future of Yahoo Music. The site attracts big numbers for online, free, ad-supported music. But the division’s subscription service, which was started up under the two men’s watch in 2003, has found it tough to get users to download music that is not compatible with Apple’s iPod, the dominant portable music player. Under Mr. Goldberg, Yahoo Music wrestled with record companies to present music that could be played on multiple music players and was successful in releasing a few singles that way.
Ms. Davis said Yahoo Music will continue to encourage record companies to adjust their DRM standards. “It’s a shared Yahoo Music mission that we move away from DRM,” said Ms. Davis. “DRM creates barriers to getting your music when you want it where you want it.”
But media analysts said the closed system could continue to provide headaches for a company that doesn’t control the playback hardware.
“The DRM issues are very real for Yahoo because they’re facing Apple and they don’t have a grasp on the device end of things,” said Gartner analyst Mike McGuire. “They’re at a crossroads right now in how they view this service. Is this something they continue to invest in, and how do they grow in a world where the DRM issues aren’t going to be solved any time soon?”
Those problems and the recent changes at the top have led to some speculation on the chances of Yahoo selling or shutting down its subscription service.
Mr. McGuire, for example, said the departures are likely to lead to “soul searching” among the company’s higher ranks on the future of its music product.
Digital media analyst Phil Leigh said the subscription service is still the right way to go. “I don’t think Yahoo Music did anything wrong given the options they had,” said Mr. Leigh. “They had to compete with iTunes and had to sell music in formats not compatible with the iPod, and that left them promoting a subscription service, which is fundamentally a good idea.”