Yahoo to cut 15 percent jobs, close several units
reuters.com
reuters.com
Brutal.
[1] http://nypost.com/2016/01/18/marissa-mayers-job-safety-joke-...
It sucks to be laid off, but they're better off in the long run to get away from a company with leadership like that.
I know how much it sucks the first & second time, but once you see the warning signs there is no glory in hanging around.
For me, being laid off (or resigning) is just another skill I got better at (like learning a new tech stack or framework).
You are right, with leadership like that, the environment must be toxic...
Not trying to discount the human element as it absolutely sucks that many people will lose their jobs. But reallocating that capital that was tied up in Yahoo and clearly not doing any good there seems like an overall smart move if it couldn't be saved.
What would a better alternative have been?
Companies, whether it is admitted by them or not, are really for stakeholders, not just shareholders, and stakeholders includes employees; or least, wise companies will act as if that is so, even if it is not so legally on paper.
The problem is that they already sold shares on the premise of being a for-profit entity extracting values to their shareholders.
They could have become an employee-owned co-op or a non-profit entity like Wikimedia or Craigslist, but at some point they chose not to.
I'm asking for realistic alternatives. While I appreciate the thoughtfulness of your approach, I wouldn't exactly consider that realistic.
My philosophy is more stakeholders than shareholders. Hers apparently was, too. It says at least make an attempt to innovate your way out of a bad situation to get a win for everyone. She tried that with an impressive effort. Ship long sailed, though, so she failed as I expected. Now, with efforts attempted, it's morally right in my model to abandon Yahoo and re-invest that capital. Workers and customers should definitely jump ship, too, if they can.
While we're at it, consider Amazon. Every piece I read for years was how they should do the same do to no or low profit. Yet, they pushed forward with growth and one innovation after another. One set of those became Amazon Web Services. A mini-revolutiom in IT followed. Would you rather they had just listen to finance people and quit long before that? What would cloud market look like?
I just don't think that was even possible at this stage of the game for Yahoo what with their shareholders calling for blood, their weird relationship with Alibaba such that Yahoo's corporate structure is essentially their product, management issues, lack of vision, etc.
So once something gets to that point, I'm not sure it really is possible to turn it around. So the next best thing is reallocating that capital to things that can move forward in a more productive manner.
But again, I absolutely 100% agree with "stakeholders over shareholders." Just don't think that is realistic with this particular scenario.
Oh that's cool. To be clear, I wasn't taking it as anything: just an opportunity to explain what my reasoning was. Especially here, I figured there would be people on both sides I mentioned. Hence presenting it that way and being clear about my own bias.
"I just don't think that was even possible at this stage of the game for Yahoo what with their shareholders calling for blood, their weird relationship with Alibaba such that Yahoo's corporate structure is essentially their product, management issues, lack of vision, etc."
Oh yeah. I totally agree. It appeared to be beyond salvage. It's why I thought the results she got were impressive as I didn't expect it to even go that far. I might be wrong about whether it was a good move to make the attempt. It could've been foolish given how bad the situation was. I'm open to that.
I was just glad she gave a damn enough to try something rather than soak up money and gut it. It's all I see with so many tech and other companies that had a lot of untapped potential. I wasn't sure what was left for Yahoo but they had plenty of tech, smart people, & ad connections. So, I like that an effort was made which actually should've been made years ago by other management.
Meanwhile, the process of getting rid of it begins. And I still have to dig back through Yahoo email in case I missed anything important. Before they delete it...
>She tried with an impressive effort
That's one way to view it. I'd say it was a pretty expensive, unimpressive effort.
>rather they had listen to finance people
Uh, you realize that it's also "finance people" that have been standing behind Amazons rise as well, right? Just because you read a couple of articles on HN about activists wanting to see profits, in no way does that represent all "finance people". Amazon has a lot of shareholders. Like it or not, "finance people" aren't some homogeneous group of self interested, greedy trolls.
Look up Publix or Costco for an example of stakeholder model working in low margin industries. Probably could work in high margin tech.
http://www.forbes.com/sites/briansolomon/2013/07/24/the-wal-...
"That's one way to view it. I'd say it was a pretty expensive, unimpressive effort."
Feel free to offer a different set of recommendations that would've turned it around..
"Just because you read a couple of articles on HN about activists wanting to see profits"
Just discovered HN recently. Try most articles in the media and finance people they interviewed. People were either impressed with their consumer value or talking about how they were a failed business in the making. Rarely saw an exception when the name came up.
Could've been some media bias that made it appear one way while real opinion of investors was different.
Marissa Mayer accidentally fires dozens of employees: http://nypost.com/2016/01/30/yahoos-marissa-mayer-accidental...
As for Marissa, I wonder how easy it'll be for her to find a job. "I bought Tumblr, I threw lavish parties when we really couldn't afford it... my company was about to go under until someone purchased it... BUT, I did get people to stop working from home!". "Hire me?"
Edit - Marissa, not Melissa.
Marissa
> I wonder how easy it'll be for her to find a job
Marissa's net worth is well into nine figures. I wouldn't worry about her too much.
And she can always run for president as a Republican.
Yes, I hear this idea that once someone has made this much money that they are fine just stepping out of the game and living off their earnings. But one doesn't stay a part of the Triple Comma Club™ if they spend like she was spending as CEO. (without some sort of replenishment)
Her net worth is around $300 million. I'm sure she could maintain her spending habits off interest alone.
From the comments on this part of the thread, you'd think Yahoo was some kind of Internet colossus before Mayer took their reins, rather than an overgrown relic kept alive and profitable through sheer inertia.
I think a much more likely explanation is that Marissa failed because she brought no new ideas to the table, and also made a whole bunch of boneheaded blunders like this:
http://gawker.com/5987043/yahoo-ceo-marissa-mayer-installed-...
and this:
http://nypost.com/2016/01/18/marissa-mayers-job-safety-joke-...
while she unashamedly pocketed $36M for her first six months worth of work.
Yahoo's problems have absolutely nothing to do with Mayer having a "nursery" put into her office. She could have taken minimum wage and no other compensation, and no part of this story would have turned out differently, except they might have sold the company by now.
Arguments about Mayer's performance on threads like these are frustrating because the consensus (elsewhere, not here) seems to be that her first order of business should have been a significant layoff. But at this point, now that we have lurid stories about logos, nurseries, and poorly-timed jokes, there's no winning: their core business has been on a downward trajectory since long before she took over, and nobody believes they're appropriately staffed.
Later
For what it's worth, if you look at what I'm saying, nowhere am I claiming that Mayer is a good CEO. But I have doubts as to whether a good CEO could have done much to change the outcome here, except perhaps by fetching a better price at auction for Yahoo.
I was suprised she didn't fire more people.
I thought it was a mistake to bring all telecommuting employees in.
I know she meant well, but all she did was irritate employees. There was no way these employees were going to bond, and magically turn into a Google love fest.
For some reason, I still think about happily doing your work at home, and then having to come into work and bond. Yes, I think it's important, at innovative companies, for employees to be present, all around the camp fire, but it's someting that needs to be done from day one.
In my world, I still stumble upon a yahoo page, but it's usually by malware on my old laptop I just haven't fixed. I'm glad they haven't changed their look, and then suprised.
Yahoo reminds me of just how dispensable these companies are in the bigger picture. Yahoo could dissapear, and I wouldn't even flinch. I don't even know anyone with a Yahoo email anymore.
Their next CEO should be an unknown, who's really into his/her tinkering stage in life. Young, crazy, motivated, bursting with angst. Gave this person a strong financial team, but don't hire the right looking candidate on paper.
Of course they don't. That's not the point. Putting a nursery in her office was not a boneheaded blunder because the cost of the nursery (or her salary) made the difference between the company succeeding and not. It was a boneheaded blunder because at the same time she put the nursery in her office she also rescinded all telecommuting. That had an understandably (and predictably!) devastating effect on morale. The message was: I (Marissa) deserve to have this perk that makes my life more convenient, but you, silly rank-and-file employee, do not. I don't even care if you can demonstrate that you can be productive from home, I don't have time to sort that out. I'm much too busy and important for that sort of trivia. So you're just going to have to suck it up and deal with your commute.
> her first order of business should have been a significant layoff
Could be. Whatever it is she should have done, she manifestly hasn't done it yet.
> I have doubts as to whether a good CEO could have done much to change the outcome here
People were saying the same thing about Apple before Steve Jobs came back. Sadly, in this case we will probably never know because that experiment will never be done.
I'm saying something simple. You claim that Mayer had 4.6B of cash flow to play with turn around Apple. My response is simply (a) no she didn't, and (b) to the extent she had real revenue to work with, it was an encumbrance: she was tasked with turning around a company for which 30% of its income was people routing their search queries to Yahoo. It's hard to think of big moves you can make that don't somehow jeopardize that revenue stream. She's boxed in.
(Then you look at the activist shareholder critiques of her tenure, and it's like, "she spent 10MM buying iPhones for everyone on her staff", and I'm like, it's fucking 2014, almost nobody but Apple has figured out how to make huge amounts of money on mobile but pretty much everyone thinks it's the most important thing in the world to do, and she's, what, buying the staff computers to do that with? Sheesh.)
Did she rise to the occasion and do something unprecedented in business history, like Jobs did? No she did not. Executive hired to do the impossible fails to do the impossible, film at 11.
Certainly turning Yahoo around was never going to be easy. And it can be difficult to distinguish between "impossible" and merely "hard." We cannot possibly settle that question here and so there's no point in getting deeper into those weeds.
I will point out this though: I'm choosing to give Marissa and the Yahoo board the benefit of the doubt and assume that they disagreed with you, that they all thought it was possible. I'm also giving them the benefit of the doubt in assuming that they weren't necessarily wrong. Because the alternative is to believe either that 1) they are all idiots for thinking it was possible or 2) that they hired Marissa knowing full well that she was going to fail no matter what she did, and she accepted the offer and pocketed the $36M for her first six months on the job knowing full well that she was going to fail no matter what she did. That seems to me to be a much more damning accusation than anything I've said or implied. That they undertook a clearly impossible task is not actually a defense for a CEO who accepted an eight-figure salary IMHO.
What I do know is that at the time of her hire, on these very boards, people were singing her praises for the most part. Because the Valley protects its own.
Steve Jobs isn't the benchmark here. Maybe it was an impossible task to right the Yahoo ship, but what exactly did she do that was positive or innovative...at all?
What Apple lacked was a clear focus on what their business needed to be, which was selling hardware, not licensing the OS or making business software, or any of the other bad ideas they had from trying to compete with Microsoft directly.
What no one here or anywhere else seems to have an answer for is "What is Yahoo's core business". It used to be the Yellow Pages for the Internet, and now it's basically a Media company with some legacy stuff like web email.
-- http://thenextweb.com/apple/2010/06/02/steve-jobs-90-days/#gref
-- "Steve Jobs", Isaacson, pg 314
That's probably indicative that we are not CEO material :-)
It was the worst state the company had been in, but the losses had stopped even before Jobs took over. Not to understate Jobs accomplishments. Just saying a competent CEO could turn Apple from a doghouse company to a profitable company. It took a genius CEO takes a company from the the doghouse to the most valuable in the world.
It's only a "surprise" for a society that does not yet understand to what degree technology is about to create power monopolies of unseen magnitude.
In principle, Google could become the Internet.
Oh wait...
If you do the math you realize that the holiday party cost a few hundred bucks per attending employee.
Compared to other large SV companies - that are not under fire in the press - this was a cheap holiday party.
But Yahoo is competing for Silicon Valley software engineers, and perks are very common, so if you don't have free food, free snacks, office parties, events, and other benefits, you'll have to pay your employees a lot more.
Perks are incredibly cheap for the company, because people value them much more than they would the corresponding pay raise.
So if you don't understand this, it looks bad that company "wastes" millions on perks, because you don't see the many more millions it saves on salary.
This is so obviously true that it's a cynicism generator on HN, with people routinely commenting about how Google's free food is a kind of scam. But what's true and what rings true depends on the prevailing narrative, and the prevailing narrative about Mayer and Yahoo is that she's fiddling while Rome burns.
Yes, I would prefer a $100 bonus. The amount might decrease to the point that it's useless at larger companies due to economies of scale...
If so, the choice is really between "$100 worth" of partying and $65 of after-tax cash.
For that matter, do corporations pay sales tax? If not, it's more like $100 of partying vs $58 of your choice of any consumption.
(Hence why it's not always as simple as "just give me the money".)
I didn't go to the first two and only attended after that to make nice with teh boss.
You know what I want as a perk? The company turns off at 5pm. That's it, no more work, go home, no exceptions. Company email shuts down, no access on your smartphone until 9am.
Now that's a perk. I'll buy my own junk food[0], and I'll go to parties with my friends, not my coworkers.
[0] or, well, I won't - another problem with the perks, I want to snack on carrots and skim greek yogurt, not chips, candy, and beer.
That's not in the interest of most companies, so you'll have to start your own if that is what you want.
> I'll go to parties with my friends
The holiday party is completely optional. Most employees didn't go.
> I want to snack on carrots and skim greek yogurt
Our snack fridges are full of that, there's more healthy snacks than unhealthy around.
It's in the interest of companies to have happy employees. Following respectful working hours is one of the ways to do that. Doesn't have to be 9-5, if 10-6, 11-7, etc. is more of your thing.
I don't care about free food, I care about work/life balance. Office parties and free food type perks, which are just intended to keep you at the office longer, worsen my work/life balance.
That's not in the interest of most companies, so you'll have to start your own if that is what you want.
Nor is it in the interest of anyone with delayed sleep phase. Maybe a more universal form of that perk is "the employee turns off when they leave the office, but can choose their own hours".
"No more parties. We're going to use the to retrain employees (instead of firing them) and avoid layoffs."
Mayer is turing out to be a terrible CEO.
This article describes the various multi-million dollar parties.
http://www.businessinsider.com/yahoo-ceo-marissa-mayer-blows...
Someone remind me again why corporations pay their CEOs over 100m/year? And tell me about value, that's a huge chunk of change for someone in Yahoo!'s position, they could use that money to keep employees working.
Second, CEOs get paid lots of money because the market punishes firms that aren't growing and have no-name CEOs, and the cost of a name-brand CEO is probably more than cancelled out by avoiding that penalty. By the time Mayer was recruited, the market consensus was that Yahoo needed a turnaround CEO. There are no cheap turnaround CEOs for companies managing 4-5B in annual revenue.
Mayer's entire yearly salary is a rounding error compared to the total headcount cost of operating Yahoo, which is widely believed to be both tremendously overstaffed and larded with third-party contractor contracts.
Further, ask yourself: what exactly does it accomplish for Mayer to forego a salary in order to keep 1% (check my math, I might be way off) of Yahoo's workforce employed if that workforce isn't doing anything to improve Yahoo's outlook? Yahoo isn't a charity: everything it's employees do ostensibly have to have some hope of providing a return on investment.
It's here in this picture:
http://static2.businessinsider.com/image/566edfb272f2c150028...
It is, however, weird to me that everyone's so quick to blame Mayer for that. She didn't make up the game. The game stays the game. If it wasn't Mayer presiding over the decline of Yahoo --- probably still after acquiring Tumblr! --- it'd've been someone else.
For the sake of exposition, let's say Mayer makes some $$MM/y, the exact number isn't really important to my point past a certain level, which she most certainly is.
What is she being paid that amount for? Let's explore each of the obvious options I see, and an expected common reaction (Had written logical, but that's not what I meant, since many common reactions are far from logical).
- To restore the company.
This clearly did not happen, if this was her job, she failed at it, and for most "normal people", getting paid that $$MM/y seems very off compared to what we might receive in such a failure.
- To as you say, preside over the decline. (age gracefully)
The argument I'll pose for the anti-Mayer sentiment in this case can be applied more broadly, but is most fitting here. One might expect this sort of role, in parity with firings, would include policies of waist tightening at all levels. I'm not even making a stance for or against these things in this argument, but the press about a slew of very exorbitant and very material benefits when paired beside firing of boots on the ground (again, not taking a stance, just observing the contrasting sentiments) give the _PERCEPTION_ of "let them eat cake", to put it glibly.
- To as you say as well earlier, be a face for the markets.
If we chose this explanation, realize the "figurehead effect" is a two way street. A famous CEO makes markets look positively on the company (is the thesis) regardless of the company, so if a company is doing badly, should not that emphasis also be on the CEO? It seems disingenuous that the CEO gets the credit for success but not for failure. I'm not saying this is logical, but it is consistent to placing significant value on a figurehead.
This last argument is the weakest, given that the markets probably take into account perceived CEO skills as part of "figurehead" status, but the BROADER market (sentiment of the people) likely can't inspect that deeply. So if the financial market loves kingmaking, the people get to see a king, and have their own expectations which do go both ways (in terms of lionizing success c.f. elon musk, and demonizing failure)
At the end of the day, each of these universes results in a very negative sentiment towards Mayer, thus my not being as surprised at that outcome.
She's being paid to take the personal risk of career-ending failure. It's a way for her to hedge the bet she made that she could turn the company around.
This goes for all CEOs, the high salary is not compensation for labour, it's a risk premium the shareholders pay to get someone to take the job. For example, in many jurisdictions, the CEO is personally responsible for certain crimes that employees are committing, e.g. the CEO can go to jail if the company commits tax fraud.
That said, it's also a complete old boys' network and the risk premiums are extremely inflated, but that's nepotism for you.
Your final line re: network/inflated premiums seems to agree with the broader sense of what I was saying, unless I'm misunderstanding?
And I don't really think anything is career-ending for that matter. I mean, look at the mess there was after Carly Fiorina and she's found other things to do.
Disagree. If you bought YHOO in mid-2012 before Marissa joined, you'd have doubled your investment by now. I understand there's the option value of having invested in some better stocks, and YHOO's correlation to BABA, but one could still do a lot worse than doubling the investment.
https://www.google.com/finance?chdnp=1&chdd=1&chds=1&chdv=1&...
If someone offered me a shitload of money to run a sinking ship, I would have taken the job, just as she did. With this level of compensation, she's all set for life, does not need another job ever. But, with her connections and name recognition, she will have no trouble finding one - trust me. It is a systemic problem with boards of directors hiring incompetent (but well-known) executives who keep screwing up one company after another. All about connections.
The decision to keep the BABA chunk versus spinning it off or distributing it to shareholders was CEO's decision, there were other interests at play urging other outcomes.
She still had a handle on the cost structure of the underlying business - expenses related to employee headcount, office leases, new project investments, outsourcing vs keeping things in-house - impacted the stock price to some extent, things could've been much worse.
I think she was set for life well before Yahoo! offer, and in light of recent developments with GOOG her Alphabet holdings might have appreciated at faster pace than her Yahoo! holdings.
Moreover, her decisions are not terribly out of line with her predecessors' decisions - Scott Thompson and Carol Bartz layed off, outsourced and cut expenses as well.
Could she have done a better job? Perhaps. Was she the absolute worst CEO Yahoo! could've landed? Probably not.
Columns from cringely paint a interesting, changing picture over the year http://www.cringely.com/tag/yahoo/page/2/
http://thinkprogress.org/economy/2014/06/17/3449737/ceo-pay-...
The real question is: do success rates improve for sinking companies that hire a expensive CEO versus those that keep their existing leadership or hire no-name CEOs?
I skimmed the paper and couldn't find a counter argument, but I didn't understand all the jargon.
If you cut perks, your best and brightest will leave much quicker, the elves leave middle earth. And then your company is essentially screwed, because you'll lose all of your key personnel. And you won't save very much money. This is the way of the bean-counters who know nothing of human motivation and morale. $1000 per employee is less than a percentage of their yearly salary.
If you instead decimate the company, many who survive the culling will be thankful to the company that they are keeping their job, and you'll actually save ~10% in salary costs and future obligations.
(The clever employees who see this coming will leave way before either scenario anyway)
Notice how I phrased it. It's not cost cutting. It's about investing in employees. That is something the "best and the brightest" love.
They are also not very interested in training, because they don't need it. They want to work on cutting-edge projects.
"Training" is something that the poor performers are going to flock to, because it benefits them. Which is the polar opposite of what the top performers want.
I wouldn't be so sure. I love a good conference. I don't care much for the content, but the networking opportunities are great. I mostly do trainings to build my "Rolodex;" I feel that this will only help me when I decide on starting my own business (I want to sell something that other businesses will use, and knowing someone inside of a business >>>> cold calling)
Instead, I'll just point you to Deming's work on management. He transformed Japan's post war economy into the powerhouse it is today. He's also responsible for the much of the transformation here in the USA during the 1980'ss & 90's.
Long story short: it's the goal of management to make workers successful. Re-training is the absolute best way of advancing the company.
Cutting perks will gut the company morale.
Re-training on the job is already available at most SV companies of this size. You want it, you get it.
The original article that called out the lavish party was explicitly doing so to paint Marissa as a CEO that spends frivolously, and the author wanted her to move that money from employees to the investors instead.
"The beatings will continue until the morale improves" .... ever heard of that?
Again, I'm not suggesting cost cutting. I'm suggesting a move from frivolous expenses, to those which help make the employees more successful.
As I commented before, Deming was all about training employees over firing them.
The link you posted contains great tips for assembly-line factories filled with replaceable hourly workers. SV is.. not that.
I've been at companies who followed the above and ended first an annual 4th of July party, then scaled back the Christmas holiday party, then started cutting semi-regular, informal, socialization activities over lunches and what not.
There was nothing more damaging to morale at that firm than killing the few times a year we got to have a bit of fun on the company's dime. We worked hard so the CEO could buy another house, and the reward was "no bonuses, no parties this year." I watched the life drain out of that place.
Killing employee morale activities costing millions won't save jobs lost by spending billions or implementing anti-employee policies.
You'd have a hard time arguing against a year-end party.
If the company is not doing well, it's a morale booster.
If the company is doing well, then hey, why not have a party?
We had record profits last quarter. Our market is growing. And we don't get jack squat for perks. We come in, work, go home. No holiday parties. Not even free coffee. I used to complain...actually still do. But, that's the expectation now. Hope it improves, but not holding my breath.
On the other hand my salary is 10% more than my previous company which had free snacks, Christmas gifts, etc.
For example we just had a 5 day architecture design workshop...people from different parts of the US flew in to participate. So that's flight, hotel, rental car, meals, etc.
However we only got breakfast one day, and no lunch. To me it makes sense to provide food to get people to come in early and have light discussions over food. Make more use of everyone's time.
That was a RELATIVELY good purchase.
† for want of better term
- Tumblr was reorganized and lost its independence [1]. Not a sign of happiness with their progress.
- Tumblr has an enormous third-party CDN bill, to the extent that even $100mm of yearly revenue wouldn't come close to covering the expanse. Their traffic levels are greater than those of some entire CDN providers, and the rates they negotiated were not particularly rock bottom. Yahoo has to get out from under that situation to ever make Tumblr a profitable enterprise.
- Tumblr has very little monetizable content. Yahoo ads on Tumblr sites have still not come to fruition after several years of management claims that it's around the corner. They will presumably face a user revolt if and when it does roll out. Display ads only appear in the admin dashboard, which has far lower hit rates than the public facing sites themselves. The vast majority of sites are permanently non-monetizable because they are one of: porn, illegal content, branded corporate sites like yahooeng.tumblr.com. Yet to discard sites like those is to severely damage Tumblr's traffic rankings, which is the only thing they have to sell ads against (if they sold ads).
I see a lot of similarities between Tumblr and a Yahoo acquisition from a previous era: GeoCities. They're both instances of Yahoo spending too much to buy what they think is the latest hot thing that will build their userbase, and instead getting nothing in return but a giant bill and a no way to gain money or prestige off of the product.
[1] http://www.businessinsider.com/tumblr-is-getting-sucked-into...
http://www.engadget.com/2016/02/03/tumblr-lower-valuation-ya...
If you work at declining companies like Yahoo, HP, etc you should already consider your job lost. Just show up for the paycheck while planning your next move. This has to be what >90% of people are doing as-is. People aren't that stupid... are they?
This is CERTAINLY not the last round of layoffs at Yahoo as it positions itself for sale. Same goes for every declining business in every industry in every country in every era of business history.
What is their business now? Having no work is a leadership problem. If there really is no work then layoffs are a must, but the company is floundering around with no real direction....
As an outside watcher I have no clue (I am also stupid). Hopefully people working there have better insight than myself.
Keeping the C-levels employed?
Recently I tried watching Yahoo's Other Space (https://screen.yahoo.com/other-space/), but gave up after a few episodes - even though I enjoyed what I was able to watch. From what I could tell, the show wasn't available through the Yahoo Screen mobile app. (Which brings another question, WTF is the point of that app?!) The website lets you watch streaming video, but the site is impossible to use from mobile, and it would randomly crash every iOS browser I tried (Safari, Chrome, Firefox). When I tried watching from a desktop the video stream would occasionally freeze, and the Ads would randomly reset the stream back to the beginning of the episode.
Yahoo reminds me of Apple in the mid 90's. Even good ideas are just terribly executed. They hired the wrong leader to try and fix their problems.
I think Yahoo's business has been to be the internet, but they never noticed that other companies and services took that all away from them piece by piece. Now they're just a stock.
It sucks that this is locked into yahoo, but I'm sure it was the most convenient option at the time.
If you assume zero discount of the Alibaba stake due to taxes or other uncertainty, then Yahoo has zero or negative value.
However, there is >0% chance that the Alibaba stake will be taxed or that Yahoo leadership will sell and spend the money instead if returning it to the shareholders.
The more accurate statement is that the uncertainty a "core" business brings outweighs the value of said business. Part of that uncertainty is the tax treatment issue of BABA shares, the other part is a vote of (or lack of) confidence in Yahoo leadership.
Yahoo itself has plenty of value. Probably not 10B, but probably more than 1B.
http://static.tumblr.com/7drgjla/386nnw4n9/yahoo_inc._2014_a...
"We generate revenue principally from search and display advertising on Yahoo Properties and Affiliate sites, with the majority of our revenue coming from advertising on Yahoo Properties. Our margins on revenue from advertising on Yahoo Properties are higher than our margins on revenue from advertising on Affiliate sites as we pay TAC to our Affiliates. Additionally, we generate revenue from other sources including listings-based services, facilitating commercial transactions, royalties, and consumer and business fee-based services."
Matt Levine did quite a long writeup about this a while back: http://www.bloombergview.com/articles/2014-04-17/how-can-yah...
Taking an uncharitable view, Yahoo!'s core business actually has negative value -- and the current round of layoffs is a direct result of Wall Street pressure to stop subsidizing said core business and preserve the value of the Ali Baba stock.
I imagine the natural duopoly of tech is at work here. Google/Bing is pretty much it for web searching in the US, with no room for whatever engine Yahoo is borrowing this week. Gmail (gmail.com, google business apps, etc)/MS(Outlook/Hotmail, Azure, Exchange 365) for mail, etc. Not sure where Yahoo even fits anymore.
That last trade price times number of outstanding shares -- market cap -- is the only common basis for overall valuation of publicly traded firms (that is, the only basis that is guaranteed, by definition, to be available for every publicly traded firms) does not mean it is a particularly accurate and meaningful measure of the overall value in any useful sense.
Oh man is that true, especially in the case of a supposed Internet ecosystem that's got issues with keeping properties up to date and coherent. Surely some of these properties have product managers that have not fallen asleep, and who are in tune with how to keep their products relevant, who have features they want to implement.
Being "overstaffed" in an environment full of poachers means your C-suite hasn't got a plan, or even remained connected with product management to make small-ball plans. They may find that renovating their slummy properties doesn't pay off. But this smells more like cleaning up the results of senior management lackadaisy than a purposeful trimming.
1. Layoffs where an entire industry is downsizing, and not everyone who was laid off will be able to find jobs in the same industry. I have immense sympathy for these folks - in many cases it is difficult if not impossible to get back to the same salary level.
2. Layoffs where one company couldn't make it, but the industry as a whole is extremely dynamic and growing by leaps and bounds. This is Yahoo's case. While it's always hard when "somebody moves your cheese", it shouldn't really be hard for those laid off to find new jobs. Plus, the writing was clearly on the wall for a long time, so it shouldn't be totally unexpected. As someone who has been in a similar situation, if anything I saw many people looking to be laid off because they would rather have a sizable severance than go down on a sinking ship.
I was in a startup where I basically sat without clear product to work on for a month, and I quit within a three months because it was a complete waste of my time and creative potential.
You don't need a "broad product strategy" to do your job well. Unfortunately, many products coming out of Yahoo are shitty; and this should be fixed regardless of who's on top. Whatever you're working on, make sure it's first-class.
Just read this and weep: Jeff Bonforte, Yahoo's SVP for communications products, says: “I just try to ship products that I’m not ashamed of" Source: http://www.nytimes.com/2015/12/02/business/dealbook/yahoos-b...
Interestingly they seem to hold there jobs while people who just stop doing anything with no direction often don't hold their jobs. So it is presumably a suvival trait.
One of the more interesting things my manager at Sun told me was that the difference between a leader and a worker, was that a leader was a going somewhere and a worker was helping them get there. So if you want to be a leader you need to have some place you are trying to go. It gets you into trouble though, when there is only enough energy to follow one or two paths, it puts you on the short list for removal if your path isn't one of them.
Unfortunately, people lose their minds when some company announces layoffs, like some purposeful social harm is being done, yet somehow when a company is having massive hiring no one really questions how much of that is valid or sustainable. People become like you describe; they master the do nothing job via office cult cargoism. It must be exhausting to have a 'fake' job like this and knowing damn well that if you lose this job you may have nowhere to go.
I think 100 years from now our great grandkids will be living in an automation utopia and look at our daily work lives as something just a harrowing as any story from Kafka. There's a lot of craziness we let slide because we've convinced ourselves total employment is one of the main moral goals of a capitalistic society. Its probably not sustainable in later stages capitalism.
In my lifetime I expect to see GMI deployments in various nations as automation keeps eating the world. I have yet to be convinced that the status quo can be maintained and the cracks on the facade are already showing. Later stages capitalism is a totally different beast than early stages. This is all new ground.
Not too long ago this sounded like crazy sci-fi talk to me, but now that I'm in a partial management position I've been involved with hirings/firings and all sorts of staffing and productivity issues, this has shown me that employment in general is something of an illusion. I'd say 80% of the work/value done here is by 30 or 40% of the staff, maybe 20% if we're being really tough. A lot of hiring, if not most, is vanity hiring by VP's who want more people under them for status and budget reasons. This isn't some rational engine at work here. Its its own kind of bubble and as we saw in the 2008 mortgage crisis, it gets deflated pretty easily when money stops coming in. (5% to 10% unemployment in 12 months 2008-2009).
It is incredibly frustrating to me, because I consider myself a creative and capable individual, who is just fresh off graduation. However, I have a micromanaging, closed-minded rude boss (company lingo: "Leader"), who I prefer to avoid at all costs. At the same time, he seems completely aloof and uninterested in my career goals, which explains why I have nothing to do most of the time.
This is further led to absurdity because I'm in a Trainee position, someone who is paid a better than everyone else at their level of responsibility and gone through extra training with hopes they will ascend to management. I get no training either.
I've been looking for another job for over a year and cannot get anything else because of lack of experience and a nation-wide political+economical crisis.
Decent programmers are still very much in demand, no matter what nation-wide crisis you are talking about.
We're not doctors, cops nor lawyers, the world won't cease without us. Hell, even civil workers in governments although less salary, have better safety than we do. I can't shake the feeling that essentially we'll realise that all these companies we work for don't really "exist" as they're just the imagination of someones account balance. At some point its gotta run dry.
But I work in a financial department where it's an alien concept, and as such, unauditable and dangerous. I barely get opportunities to put it in action these days.
Unauditable is a fun accusation: you probably use spreadsheets---and they are notorious for being write-only.
You can form a longer term plan to leave that industry and join the tech-industry.
I work with dinosaurs apparently.
I once did an internship at the SAP mothership. They have good food.
Makes sense. But are aren't we seeing such inefficient companies crumble ? Everything is so monopolistic?
On the one hand it's harder to find better jobs as the present job is already kind of nice. On the other hand there's the uncertainty of where everything is going with regards to your long term future at the company and your career.
You can't bring up the fact that the team is bloated because you're basically telling them that you should be fired.
A very awkward position to be in.
And quite a lot of display advertising.
So you're right, a bunch of inefficiencies exist by design, a bunch of them due to the company's age (and to Yahoo!'s credit, their contemporaries like HotBot or Lycos or Excite are gone completely) and need to build certain stuff in-house, and a bunch of it created internally to guarantee job security in some departments.
They've outsourced search and on the Web/media front are doing things that Wordpress.com is doing at much better scale with fewer people, so yeah, there's potential for improvement there.
In the past 10 years with Google I - use Gmail, Google Drive, Google docs, Google sheets, Search, Google Maps, Chrome, Waze and YouTube on a daily basis. I've also bought Chromecast and occasionally use Hangouts & Wallet. I'm excited about a lot of their Google X projects.
The 15% job cut is because Marissa Mayer failed to suck me and millions of others into the Yahoo ecosystem.
I think part of that is shifting Yahoo from a media company to something more like Google.
https://www.google.com/search?q=Yahoo%27s+Marissa+Mayer+to+U...
The article was indeed changed; edited OP.
edit: hmm guess not. is this allowed by google?
But then started their decades long decay, whilst the Internet boomed the Yahoo directory became old and static, I moved to searching on Google pretty quickly and jumped when gmail was released with it's unprecedented 1GB of free space. Around the same time my Yahoo mail became my junk account, my personalized Yahoo home page started bit rotting, my Internet connectivity command became `ping google.com` and I never went back to searching on Yahoo. They also jacked up prices of Yahoo domains by 300-400%, violating existing customers trust and prompted me to go shopping for a new service provider pretty quickly.
Although I've been disconnected from all things Yahoo, I imagine it's been operating in its own niche corner of the Internet, I'm told Yahoo mail has hundreds of million users (my Junk account likely counted), I'd be interested in the number of active accounts and their demographics, my guess goes to an aging population. It's now been years since I heard anything positive coming out of Yahoo, they've hit the news with MS's failed acquisition, switching search engines and CEO churn - but otherwise I can't recall anything new coming from Yahoo that wasn't M&A.
They seem like a draconian company holding onto legacy labor-intensive degrading assets which happens to be sitting on a gold mine with their Alibaba investment. I don't see how the current structure is capable of re-inventing itself so stream-lining their existing operations and trimming off dead-weight and losses seems like the only way forward. If they ever have a chance to becoming a tech force again they need new blood and talent pretty quickly. Fortunately they have the resources to make something but I only see it coming from outside of Yahoo, if I was them I would look at using their resources funding young, talented and innovative startups that aligns with their growth and business interests, e.g. they could mandate all ad-supported startups must use Yahoo Ads. Even with all the Talent Google has, many of their most valuable assets like Android and YouTube came from acquisitions. With Yahoo's brain drain I suspect that's going to be the only way we're going to see a resurgence from them.
Haha, I still do this out of habit too.
Also a long time ago, Yahoo made Mark Cuban a billionaire. What happened to the technology they acquired from his company?
Was it worth it? I don't see any meaningful competitors to them. Nobody has come along to knock them off. The $1.1 billion price was obviously steep for a blog service. So long as the traffic remains, they have some shot at turning it into a sustainable business. It's realistically worth 10% to 20% of what they paid for it though.
Ad impressions from adults are worth more than ad impressions from teenagers.
1. I am eager to find out why it is tailored to mobile phone and what capacity the engine would give to a mobile phone. A search engine should work on both desktop and on the go.
2. Did job research with Yahoo a couple years ago, so I am not sure how much it is true today and whether my observation is correct or not from their hiring standpoint. But I know in the past, half of the Yahoo hiring post dates were at least 6-12 months ago, which indicated either the company was struggling to find and acquire talents, or someone simply never bothered to cancel the request and the team responsible for managing the hiring posts never bothered to check with the requester regularly. Either way, it was bad for a job seeker to see a company fail to remove job posting from months ago.
IMO, if you are still hiring the same title for multiple job filling, submit a new one and put a new date.
Yahoo was the internet destination back in the 90s and into the 2000s until Google started to eat their lunch in search and email.
In my opinion, Yahoo's strength was its diversity; it was a one-stop shop for everything internet. You could register domain names, set up web pages, sell items, conduct email, instant messaging, etc. all within the yahoo.com domain. Gradually, it seems that other, nimbler competitors have gradually chipped away at Yahoo's lead until it seems they don't do anything particularly well compared to the competition. Too bad.
They still do have 400 million email users, and email users are loathe to change, so that business is probably safe for a while. But with nothing new to offer, and many good offerings sinking or gone, Yahoo is becoming a low price acquisition target. Sad to watch; at one time it was the iconic Internet business, in the Fortune 500, that could seemingly do nothing wrong.
I always considered that move to be simply Mayer forcing some attrition without having it declared a layoff.
I consider that its greatest weakness.
It didn't do any of these things particularly well. So focused competitors (Google, GoDaddy, eBay/Amazon, Skype/AIM, etc.) eventually took over and dominated. Yahoo never really retaliated by making their services any better. In fact, I can't even think about any major overhauls to any of Yahoo's various products. They've come out with a few nifty things (none of which I can even remember by name) and that's all I can remember about them since 2003-2004. In 2012 I was surprised to hear they were still in business, to be quite honest.
I don't know what's the big deal about that. It affected ~200 people max. Yahoo was just tightening the restrictions, bringing them in line with the rest of the Valley companies. And yet people still think that it was a big deal; it wasn't.
(Source: I was there.)
It did in no way impact productive employees who needed an occasional flexible schedule.
But that's not something you can tell the press, so it was spun as it was spun, and that's what people remember.
It was a stupid policy decision, it damaged the Yahoo's public reputation due to their incompetent PR (nothing new there) and it has cost Yahoo a considerable number of excellent (but not truly irreplaceable) employees.
In conjunction with the drive to re-centralize teams back in Sunnyvale (after other drives to de-centralize to less competitive markets to hire better people), this cost Yahoo a lot of their network engineering team, among other groups. LinkedIn, Apple, and other companies have reaped the benefits of Yahoo's short-sightedness.
Whenever a company has to resort to cleaning house to rid itself of dead weight -- either by "banning" remote workers, mass layoffs, or whatever else -- the real story is that they simply don't know who is doing good work and who is not. If they knew, that, then the non-workers would already have been separated from the company.
Either the managers are not suited for their roles or not empowered to perform the duties of their roles or terrified of political nonsense like losing headcount and reqs and being demoted. Yahoo has consistently failed to properly measure employee performance, either taking a lackadaisical approach to performance or using pseudo-scientific nonsense like bell curves. As a result, there has always been a lot of dead weight -- inside the offices is no exception. They're currently being sued for their firing practices, and the suit suggests that the performance measuring system is wielded punitively for political purposes. I don't find this at all hard to believe.
There is no easy fix to a poor work culture, and I don't think Yahoo really has ever had the stomach for the hard fixes. The culture is too poisonous and it has persisted too long. It doesn't matter now though, Yahoo won't be around in its current form for too much longer.
I'm one of them, and Yahoo makes precisely zero dollars from me -- they've been a free IMAP server for almost 20 years. It will be a huge PITA when they die and I have to tell a bunch of people to update their address books. I wish there were a way for me to pay them a few bucks to host my mail, because other options like running my own mail server and "sharing" everything I say with Google are not so good.
Doesn't seem worth it to me, but it isn't that expensive in the grand scheme of things. If it makes you feel better about paying them, at least circa 2012, only users on paid mail farms had their mail data backed up. Everyone else's mail was not ever backed up (although each farm has a dedicated Netapp Filer which provides operational redundancy).
It also seems kind of hard to believe that Yahoo makes $50/yr off of ads per user. They certainly are not pulling that in across the hundreds of millions of mail accounts they claim to have. Since Yahoo is getting the money up front and without the work and risk of selling ads, I would actually expect it to be priced at a discount versus what Yahoo would see from ad revenue.
(and yes, we back up everyone's email)
Multiple rounds of layoffs destroy company morale. Better to do one big one, and then hire back if necessary.
This is how you lose all the good people.
Yahoo's never really built an ecosystem like Google and when you couple that with low performing acquisitions you get job cuts.
The main thing they've lost out on is not having something that competes with Google on ads. Especially the part where Google's entire ad buy market is automated while Yahoo's isn't. Their management made a big bet that just giving out media and other cools stuff for free to users would bring in enough eyeballs to make things profitable. That worked for awhile, but the switch to mobile and a large number of other competitors on the Internet ad front has hurt both income and market share.
That's still a pretty big company in tech terms. A bit less than Facebook.
Their Q315 was just about larger than all of Yahoo, and Facebook's sales are growing at 50%.
Facebook earned $1.56 billion in net income last quarter (and they'll do $5+ billion annually going forward). Yahoo is struggling to stay near $50-$100 million per quarter. And that's net income, skewed by various b.s., Yahoo is producing lots of red ink on operating income (FB has ~30% operating income margins).
Facebook is going to hit near $22-$24+ billion in sales over the coming four quarters. Yahoo is stuck around $4.6 billion.
Facebook is a cash generating machine, while Yahoo is becoming AOL: trying to extract dwindling amounts of cash from legacy businesses.
It's a really bad contrast these days.
It saves 3 characters over "Yahoo to cut 15% of jobs and close several units". Maybe allow for more Twitter hashtags?
CNBC> Yahoo to cut 15 percent jobs, close several units: WSJ
reuters seems to have updated the title.
Even though it said WSJ, WSJ has a different headline.
I wonder why they'd do it, instead of an internal transfer. Any idea why?
But mostly, Yahoo has a bunch of successful properties (finance, sports, tumblr) that still have users.
Put it another way. Let's say you had 100k that you were able to invest in your own startup. After a number of years, you found that you could support 5 employees at your startup, but you weren't, and had no hope of, being profitable - there was no "extra profit" for you. Would you be willing to just turn over your investment as charity to your employees?
Sure there is, but it's not the purpose of companies to provide that, but should be done by the society (government) if the society decides there's value in that.
I like how this contrasts really nicely with a different view, where the ideal state of society is small government that leaves everything to the market, often mentioned in the same breath with keeping taxes as low as possible.
I think the whole basic income thing is interesting, but unless/until that's implemented, a society that mainly relies on companies to power and own the country should also demand from companies to ensure that people are doing well.
Anyway that's going off-topic, my initial point was only that the default move for companies without sizeable profits or losses doesn't have to be to wind them down. I care less whether you call the result a charity, a non-profit or something done by the government.
Turns out second place still pays the bills, and takes much less risk than trying something new. That's Yahoo's core strategy.
They could turn the lights off in California and make more money than they do today.
Yahoo netted $7B : http://finance.yahoo.com/q/is?s=YHOO+Income+Statement&annual
Big, mature companies have to go through layoffs now and then; get rid of the dead wood.
What's the problem?
http://i.imgur.com/f23T3Xc.png "Gain on sale of Alibaba Group ADSs"
Why wonder when you can find out for yourself?