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Excerpt from our One Page Annotated Wall Street Journal Summary (receive it by email every morning by signing up here):

Web Start-Ups Lure Executives At eBay, Yahoo

  • Summary: In an irony of the internet business, yesterday's 'it' companies, e-commerce portal eBay (EBAY) and search behemoth Yahoo! (YHOO) have seen their talent pools drained by smaller, newer internet companies. The trend of employees at some of today's most established and profitable internet companies voluntarily leaving to take jobs where they earn as little as a 10th of their previous paychecks but gain added responsibility has been accelerating of late. Yahoo! and eBay shares have recently dropped heavily, lowering the value of employee stock options and therefore the fiscal incentives for employees to stay put at the more established, publicly-traded internet companies.
  • Comment on related stocks/ETFs: Yahoo! and eBay's current predicament is reminiscent of what Microsoft (MSFT) must have been facing during the dot com boom of the late 90's, when employees were jumping ship to find, newer, 'hip-er' companies such as Yahoo! and eBay. Read up on past Microsoft employees who abandoned the company for other, smaller internet companies in this Business Week piece from 1999 entitled Outta Here at Microsoft: The software giant is losing key talent to the Internet.
Source: Following in Microsoft's Footsteps, eBay and Yahoo are Losing Talent to Smaller Internet Startups