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.
October 22nd, 2008 at 3:35 pm
When I read this post, it was as if my thoughts had jumped directly from my brain onto your blog – even down to the ‘his baby’ reference.
By analogy I recall seeing a story about Sandy Lerner, one of the founders of Cisco. I think it was on 60 Minutes. IIRC, it cast her as being a victim of a ruthless VC when she was later fired. What they didn’t emphasize enough was that, after giving up majority control of the company, the founders were just employees. It wasn’t their baby any more.
Anyway, it will be interesting to see what Carl Icahn has to say. Maybe he’ll find more supporters in the board room after this.
October 22nd, 2008 at 7:01 pm
[...] 22, 2008 in .net, Microsoft Apesar de não ter escrito nada de novo, acho que o Phil Wright resumiu tudo perfeitamente: Yahoo have announced they are cutting 10% of its global workforce, about 1500 people, as it tries [...]
October 22nd, 2008 at 9:51 pm
I bet MS is even more escatic that the price has dropped so much more which means they could just do a hostile takeover and buy up a majority of the shares instead of trying to work a deal through the board. And I bet if MS waits maybe another 6 months to a year it’ll be even twice as cheaper. However, the risk is that another company might try and buy out Yahoo before MS does.
October 23rd, 2008 at 12:57 am
Yahoo has lost the search engine war. Its over for them in that market. Where they need to focus is the service war such as email, photo hosting, etc. I have personal experience using their email service and how they refused to take care me (their customer). A year or so ago I was on SBC (Southwestern Bell which later became AT&T) DSL. Part of my “package” was premium email with no ads and I enjoyed it. The Yahoo email system they bought from Outpost (or whatever the name was) is a very well built Ajax based email system and while I prefer Gmail, I believe they Yahoo solution is actually much better built from an end-user perspective.
2 years ago they (SBC and Yahoo) rolled out a new version of the email system and with it came horrific ads posted everywhere through the interface. They put gigantic motion ads (dancing babies and such) on the right side of the UI and plastered smaller text based ads everywhere else they could. I was furious and called support. Both AT&T and Yahoo gave me the constant run around and I eventually found out that ads where now a part of my “paid” service. For me this was the straw that broke the camel’s back so I canceled my account and moved to Cox Cable.
During the cancellation process I followed their instructions to “disconnect” my yahoo email accounts from SBC but the instructions were not complete. One of my sub accounts was locked during the process and I was no longer able to login to it. I spent about 10 hours on support calls trying to get the account unlocked and eventually found out that I had to wait 90 -120 days for the system to auto-unlock my account. Luckily it was my gaming alias and not my primary personal account.
Lesson learned, I no longer use Yahoo has my primary email address and regardless of what services Yahoo sells, I will not trust them blindly again.
January 15th, 2009 at 6:58 am
Steve Ballmer couldn’t think his way out of a bucket of water — he has as much creative power as a dear in headlights. Only when Microsoft start producing software for the Human race will we see real growth in this industry.
Apple are gaining ground in the OS segment, but only a few % per year — it’ll be a while before Apple can seriously challenge Microsoft for OS dominance. Until then, we “live with” whatever bones Redmond tosses out there — the Kmart of technology where Windows 7 Beta is a “blue light special”.
And what has Ballmer done for Microsoft’s stock lately? It has been many many many years since it split — used ot split once a year back when Microsoft had some creativity.