YOU'RE the Boss!

[Aminka Ozmun]

You are the boss; what would you do to reform Yahoo! and take it back to its glory days?

Yahoo! has got the audience but, according to all the articles on the company these past two days, it supposedly "doesn't know what it wants to be" and, unlike back in the nineties and early aughts, doesn't have "anything to make you want it as a homepage"....

So what would you do to make it something people visit first thing again and again, again??

It's funny, but reading about Yahoo! made me realize that even with lotsa traffic and major market share, a site/company can still have major problems!

[SnerpGoodWord]

At this point, I think Yahoo is screwed. Their golden opportunity to leave someone else holding the bag was the Microsoft buyout offer, which valued the company at $45B (they're now worth about 1/3 of that). When the Yahoo board passed on the MSFT offer, they in effect shot themselves in the head. What you're watching now is just the blood running out of that wound. It can't be fixed at this point - the mistake has already been made.

Simply put, Yahoo has nowhere near the capital or skilled workforce required to even belatedly match Google, let alone move ahead.

[Aminka Ozmun]

So as CEO you'd simply present a plan for closing up shop, SnerpGoodWord?

I'm serious; this is a company that's still got how many millions of dollars and significant market share. If it were privately held, it probably wouldn't be causing its owners any amount of grief! But few investors are as patient as Buffett, it seems...from my laywoman's perspective, it's a fairly sound property still.

[SnerpGoodWord]

Originally Posted by Aminka Ozmun

So as CEO you'd simply present a plan for closing up shop, SnerpGoodWord?

The steps that now have to be taken are the responsibility of the board, not the CEO. But as a board member I would push for a sale, as the board is now doing.

The buyer will likely largely dismantle the corporation. In fact, it's highly questionable what value if any Yahoo has beyond their liquidation value. With falling market share and no hope of stemming that, about the best they can do is sell ads to the few old people who are too set in their ways to switch to Google.

[Aminka Ozmun]

Um, not sure about the CEO simply being an automaton. Obviously, s/he's hired not simply to implement the board's vision, but help craft that vision in the first place.

Anyway, I guess you wouldn't take the job? I don't get it. Are you saying that even if someone paid you millions of dollars a year you'd have no idea what to do with Yahoo! beyond, apparently, recommending to the board to just find a buyer??

Me, I have no idea right now, but I'm sure I'd think of something for a multi-million dollar salary!

[dkhoe]

Whether large or small, a business needs a compelling reason for customers to patronize it. Marketing 101 would ask, what is yahoo's differential advantage? Surely it's not too late to re-position itself, or find a niche where it might compete effectively?

One of the email addresses I use is through yahoo, so I'd hate for it to go away. Well, that represents one (captive) market right there, for starters

[SnerpGoodWord]

Originally Posted by Aminka Ozmun

Um, not sure about the CEO simply being an automaton.

In this case there's not even going to be another CEO. The board has already stated that a CEO search is not a priority for them, which makes perfect sense given the situation. Why bother paying someone millions to look at the bleeding head wound and say "Yup, it's bleeding. Shouldn't have shot ourselves in the head. That was dumb."? The board already knows that.

The only way the board will appoint a new CEO is if they fail to find a buyer for the company and have to liquidate in place, in which case they'll like hire a banker type to preside over the process.

[Entelechy]

Comparing Yahoo's market value to Google's or Microsoft's, they're hardly even considered a competitor. Yeah, Yahoo has bigger search engine market share than Microsoft, but big deal. The company's net worth speaks louder than anything, and as we can all see, it is hurting badly. Plus, Google is still the obvious champion in that arena anyway.

I think that Yahoo is slowly but surely finding itself becoming obsolete. Kinda like Netscape and AOL.

I agree Snerp, should have definitely sold to Microsoft. Perfect example of an ego getting in the way of success.

[SnerpGoodWord]

Originally Posted by Entelechy

I agree Snerp, should have definitely sold to Microsoft. Perfect example of an ego getting in the way of success.

Yup - when someone offers to pay you 40 years worth of income for your floundering business it's not even a question. You say thanks that God looks after drunks and fools, shout "SOLD" at the top of your lungs, and move on.

[Aminka Ozmun]

Well, I'm not so sure if Yahoo! should have sold to Microsoft **if** the objective was to continue with the company and not simply sell it out to be dismantled but making lotsa money in the process.

Yeah, maybe Jeff Yang's ego as a co-founder got in the way but insofar as a CEO's looking to grow or at least sustain the company, it seems like he made the right choice. Of course, if you subscribe to the notion that CEOs serve the shareholders **and** that shareholder interests are strictly and solely monetary, then yeah, they should have sold...out.

(Not taking sides here; just sayin'...!)

[SnerpGoodWord]

Originally Posted by Aminka Ozmun

Well, I'm not so sure if Yahoo! should have sold to Microsoft **if** the objective was to continue with the company and not simply sell it out to be dismantled but making lotsa money in the process.

The price offered was so staggeringly high compared to the value of the book and operations of the company that continuing should have been out of the question.

[Aminka Ozmun]

Yes, SnerpGoodWord, but consider: would you have advised Warren Buffet, say, to have sold out his Berkshire operations back when he had hit a (now obviously temporary) plateau or setback??

Or maybe I should just learn to play poker first!

[lycan]

What are the main purposes of the internet?

1. FarmVille
2. Porn
3. Cute cat videos on Youtube

All Yahoo needs to do is put these three things on their homepage and Bingo! They are back on top!

[SnerpGoodWord]

Originally Posted by lycan

What are the main purposes of the internet?

1. FarmVille
2. Porn
3. Cute cat videos on Youtube

All Yahoo needs to do is put these three things on their homepage and Bingo! They are back on top!

Facebook has an exclusive on FarmVille, google is far better for searching porn than either the dead Yahoo search or Bing, and google (via YouTube) controls the cat videos outright.

Sarcasm aside, you've defined Yahoo's problem. All three are in essence out of Yahoo's reach.

[Aminka Ozmun]

I feel like folks are thinking within the box here (with all due respect!): any run-of-the-mill CEO can focus on divvying up the pie in new ways. What a company like Yahoo! needs now is someone who understands that a wholly new pie has got to be baked.

It's like the old saying: when cornered, attack!

Thinking about how Farmville, porn, and search are lost is like letting bad plays the last inning or down or quarter, whatever, jinx you....

Yahoo! needs to look forward and imagine the future.

I just can't believe a multi-million dollar CEO can't take a one-month working sabbatical to devote to envisioning the future. It could even be something not totally internet-based, you know! Only leveraging what leverage (and it's got a lot, despite its relative poverty) it already has online....

[SnerpGoodWord]

Originally Posted by Aminka Ozmun

I feel like folks are thinking within the box here (with all due respect!): any run-of-the-mill CEO can focus on divvying up the pie in new ways. What a company like Yahoo! needs now is someone who understands that a wholly new pie has got to be baked.

I don't disagree they need a new pie - no one really disputes that Yahoo search and mail were/are second rate.

The question is how to get that new pie. Option 1 is to sell the company, take the resulting capital, and build a new pie. Option 2 is to try to build the new pie with largely the same employees and corporate that built the old, crappy pie. It should be apparent why option 1 is preferable, even before MSFT offered to grossly overpay for the company. That made it a no-brainer.

[Aminka Ozmun]

SnerpGoodWord,

I'm not understanding modern business practices, then!

If Yahoo! had sold the company, how would the company have existed as a separate entity that got to determine who, how, when, and why a new pie was going to get baked??

Once they sold the company under Option 1, I don't see how they would have had any control over anything anymore.

And speaking of Microsoft's offer: obviously, it wasn't done out of charity. Microsoft saw a lot of potential. What was that potential, and where did it go now such that folks are thinking of Yahoo! as the next Titanic??

[SnerpGoodWord]

Originally Posted by Aminka Ozmun

SnerpGoodWord,

I'm not understanding modern business practices, then!

If Yahoo! had sold the company, how would the company have existed as a separate entity that got to determine who, how, when, and why a new pie was going to get baked??

It wouldn't. The owners of Yahoo would get the money, and MSFT would control the corporate entity. The former owners of Yahoo could then take that money (aka capital) and start a new venture. They probably wouldn't want the new venture associated with the failing Yahoo name anyways.

The corporate entity itself is of little interest or value. A new one can be created by lawyers filling out forms for a few hours.

[SnerpGoodWord]

Originally Posted by Aminka Ozmun

And speaking of Microsoft's offer: obviously, it wasn't done out of charity. Microsoft saw a lot of potential. What was that potential, and where did it go now such that folks are thinking of Yahoo! as the next Titanic??

Microsoft made a mistake with the offer. Balmer and the Microsoft board wanted to be dominant in search, and their first idea was to buy the #2 search provider since #1 was out of reach. But it was an unsolicited offer, so they really didn't do any due diligence and as a result offered to vastly overpay.

The thing is, the offer was fairly binding. Once Microsoft made the mistake, Yahoo simply had to take them up on it and profit handsomely.

You have to remember that Microsoft is not some massive winner these days. Balmer is kind of an idiot. Microsoft stock has fallen 50% during his tenure and they've been brushed off the top of the tech heap by Apple and Google. Many of the institutional shareholders lay the blame squarely at the feet of Balmer's ineffective management. You have to imagine him and the dysfunctional Yahoo management would have gotten along like peas in a pod.

[SnerpGoodWord]

Originally Posted by Aminka Ozmun

Yes, SnerpGoodWord, but consider: would you have advised Warren Buffet, say, to have sold out his Berkshire operations back when he had hit a (now obviously temporary) plateau or setback??

Or maybe I should just learn to play poker first!

Random note: the Berkshire Hathaway purchase by Buffet was a serious mistake in the first place. By his own reckoning it set him back years by tying up a large amount of capital in an unattractively low margin business (textiles) when he had much better opportunities (namely, merger arbitrage). He made the mistake because the owner of BKH insulted him, and Buffet wanted to get even.

Point being, things are not always as the appear.

[Lioness]

Originally Posted by Aminka Ozmun

I feel like folks are thinking within the box here (with all due respect!): any run-of-the-mill CEO can focus on divvying up the pie in new ways. What a company like Yahoo! needs now is someone who understands that a wholly new pie has got to be baked.

Yahoo! needs to look forward and imagine the future.

Like the way you think; they should hire you! I have Yahoo as my homepage, I've always liked it. You can see the latest news, trends and the search engine is fine. Don't like MSN as well and hate Bing. I don't see why anyone would want the blank page of Google as a homepage.

I would say they need some kind of new wow-factor that would make it the must-see place to go. Partner with the next Farmville or Facebook. Then promote the heck out of it on TV and radio. Of course few can predict the next big thing. They should get some young Steve Jobs types to brainstorm it. I'd hate to see it die.

[hamix]

As a business student I would say:

- Sell off the search engine
- Enter cloud storage
- Focus on e-mail
- Promote Yahoo Answers

As Google is the major search engine, Yahoo has long fell off the wayside.

I would also promote Yahoo Answers. Just as there was Ask Jeeves, Yahoo could promote Answers as an ask anything resource. Google at least has nothing like that. Yahoo could also buy Dropbox, or any other well-known cloud storage service.

[hamix]

Originally Posted by Aminka Ozmun

SnerpGoodWord,

I'm not understanding modern business practices, then!

If Yahoo! had sold the company, how would the company have existed as a separate entity that got to determine who, how, when, and why a new pie was going to get baked??

Once they sold the company under Option 1, I don't see how they would have had any control over anything anymore.

And speaking of Microsoft's offer: obviously, it wasn't done out of charity. Microsoft saw a lot of potential. What was that potential, and where did it go now such that folks are thinking of Yahoo! as the next Titanic??

The capital as in the funds from the sale of shares in Yahoo.

[Aminka Ozmun]

Thanks, Lioness! I use Yahoo! for e-mail (don't like the new interface they have now, but don't exactly hate it too much, either) but have noticed myself clicking on their news stories more and more, even though the articles are often just something that originates with another source, like NYT or WSJ.

So anyway, I never thought about it but I guess I'm using it a lot like how you do, as a content portal! There must be something in this, that even the most casual users like myself could have been lured into tuning into Yahoo! every day....

[Aminka Ozmun]

Great idea, Hamix: get into cloud computing! Why didn't Yahoo! think of this??

Not sure what you meant by "capital as in the funds from the sale of shares in Yahoo"....