Yahoo have announced they are cutting 10% of its global workforce, about 1500 people, as it tries to cope with its ongoing problems. They also reported a 64% drop in third quarter profits and only a 1% increase in revenue over a year ago. So things are looking pretty rough at the moment for Yahoo and this is before the upcoming recession/depression really starts to bite.
Remember this is the same company that turned down a $47.5bn offer from Microsoft last January. I wonder if Jerry Yang still thinks that offer ‘undervalued the company’. This is where the problem of having the original founder as CEO really causes problems. Is he really thinking about getting the best value for shareholders? I don’t think so and I doubt he would have sold the company to Microsoft for any price. Not only because he hates the mother ship but also because he would lose control of his baby. Yahoo is his creation, his project, his ego trip and so he naturally wants to keep it independent and keep control over it. Once Yahoo is sold off he is no longer ‘the founder’ and ‘the special one’ inside Yahoo. Instead he becomes just another employee and that assumes that he would actually be kept on after a takeover.
His inability to think like a real CEO has cost the shareholders 10′s of billions of dollars. I believe he will keep driving the company to nowhere until the other execs finally push him aside and appoint someone that can bear to sell the company. Although I suspect anyone interested in Yahoo should just wait another year till the bottom of the recession is reached and then pick it up for a fraction of even the current share price.
I bet Steve Ballmer is thanking his lucky stars he managed to dodge this bullet.