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Yahoo – Up for Sale – Is There Anything of Value in Yahoo: COMMENTS?
 9/25/2011 edit
By PJLouis
Tags: Yahoo, Jerry Yang, Roy Bostock, Internet, bankruptcy, M&A, sale, merger, acquisition, Wall Street

http://online.wsj.com/article/SB10001424053111903791504576589301024007600.html?mod=WSJ_Tech_LEFTTopNews

 

The company’s valuation is about $18 Billion, which is way down from the $45 Billion offer Microsoft made for the company about 3 years ago.

What a disaster.  The company should place finding a new CEO as secondary to finding a buyer.  If the company actually waits for a strategic plan in order to make a decision we will be looking at the biggest train wreck of the Internet industry.  By that time the value of Yahoo stock will be next to nothing.  After all this bad press, the Yahoo board has the gall to actually tell employees it needs more time to figure things out.  The board’s actions are signs of desperation.

We need to think of Yahoo’s situation from two perspectives:  resource availability and opportunity availability.

The two perspectives I have listed are broad.  However, one needs to understand it is about understanding where you are, what you have to fight to survive, and where you can possibly go.

Bottom line, the company has few options.  Getting a new CEO buys a few headlines in the Wall Street Journal and breathing room from screaming shareholders.  However, the reality is that a new CEO would be looking at a corporate sale.

The company has very little to offer in terms of Internet value.  The company needs to understand that 2 years ago when Microsoft was looking for a way to push its way into the CLOUD it looked to Yahoo because no other company needed Microsoft.  Yahoo needs to understand that in 2008 it had nothing to offer the wider telecom/infocom business other than brand name and legacy users.  Since the early 2000s, the entire Internet industry moved forward without Yahoo’s leadership.  Since the 2008 disaster, Yahoo has done nothing to improve its position.

What does Yahoo have to offer now except for spare parts for a bigger player?  The company is one that needs a buyer.  The company has not presented a viable strategic and tactical plan in 4 years.

Roy Bostock is obviously going to allies for advice because why else would you seek advice from the very guy who got you into this mess.  By the way I am pointing my finger at Jerry Yang.  If Yahoo had recognized its need to be bought in 2008, Yahoo shareholders would have been walking away with $45 Billion in their pockets but now shareholders will be lucky if they see $18 Billion.

My frustration for this company goes way back and nothing it has done since has changed my mind.

When the dust settles on this mess the investment community will need to rethink the value of a board.  Yahoo’s chairman and board should have been let go along with Bartz.

 
Yahoo is still in the top three most trafficed websites (unique users).  Just behind Google and Facebook.
gdt gdt
9/27/2011 
It is amazing how the same was said of Netscape.  Websites have no sticky and loyal customers.  Despite the traffic, the company's stock has cratered.  Do not fool yourself into believing pairs of eyeballs have any real lasting value.  

Pairs of eyeballs is a way of measuring traffic but it clearly has not saved dozens of failed Internet-based businesses.  Companies have to generate revenue not just impressions.

The company has yet to propose a viable strategy and tactical plan in 3 years.
PJLouis PJLouis
9/27/2011 edit 
Yahoo still is the largest email provider - this is extremely sticky.   Yahoo's problem is that have done little to lttle to adapt to changing user behavior (i.e. mobile).    Hey, Facebook has just added media hub to it's list of features.
gdt gdt
9/27/2011 
Email is passe.  Yhe next generation is even moving away from SMS texting and going straight to IM and now live on Facebook.

Big deal Yahoo is the third largest email provider.  How much money are people spending on Yahoo because they are using the company's FREE Email?

It is no longer about pairs of eyes alone.  It is about relevancy and coolness.  My generation is not the one web-based businesses should be focusing on unless there is a clear path to revenue generation.

Like I said; SPARE PARTS.  Maybe they should team up with Tumblr.
PJLouis PJLouis
9/27/2011 edit 
Not sure I agree with your logic ...  Yahoo has a valuable property that they have failed to nurture.     With over $5 billion in annual revenue (just over $1 billion net) they are in trouble mostly due to a lack of growth strategy.   Yahoo has over 277 million active yahoo email users that also generate ad revenue and extremely sticky.

Yahoo's troubles are that they have flat (or slight decline) in revenue growth when the like of Facebook are growing (for now).    On a side note - Google has failed to turn a profit on any venture other than search.  Google continues to put over $4 Billion in to other lines of business with a return of just over $1 Billion - remember Google Wave?

Both Yahoo and Google have failed to effectively capitalize on Social Networking and Facebook is beginning to move in to becoming a content portal (i.e. Yahoo), Search (i.e. Google) and media center (i.e. Apple).     As Facebook continues to turn their property in to everything including the kitchen sink their fortunes will also decline.   

Not sure who would be a good paring for Yahoo, I think they are more than parts at this stage of the game.  However, they need to do more than site around and lose market share - which would only leave SPARE PARTS :-)
gdt gdt
9/27/2011 edit 
Lets do the math, the company has dropped by more than 50% in valuation.  The only motivated buyer named Microsoft can now pick them up for a song if it wished to - this makes them spare parts.

The company has nothing to offer.  Customers appear sticky but they would have no trouble abandoning the company if something better came along.

The revenue looks impressive.  However, year over year Q2 (2010 and 2011), reflects a 23% drop in revenue.  However, I will give them credit for getting net income up by 5% year over year.  It means they cut something.

The company's revenue has slipped to its lowest since 2005.  See URL link

No matter how you cut it the company is spiraling down fast.
PJLouis PJLouis
9/27/2011 
"something better came along"  You could be talking about any internet company including facebook.
gdt gdt
9/27/2011 
YES
PJLouis PJLouis
9/28/2011 
Jack Ma may be considering purchasing Yahoo.  That is an idea because of who he is and where he operates.  China is new territory.
PJLouis PJLouis
10/1/2011
 
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