Yahoo lays off 1,700 and is up for sale
vox.com
vox.com
> in the same press release, the chairman of Yahoo's board announced that the board is going to "engage on qualified strategic proposals" — that is, consider offers to sell the company.
Yahoo is not up for sale. With the alarmist linkbait title and the URL "yahoo-marissa-mayer-fail", this is possibly a sting piece with motives other than journalism.
I have no political ties to Yahoo (nor Vox) but this is not good reporting.
These were of course unsubstantiated, but now Yahoo reports another bad quarter, a bunch of layoffs, and also says this:
>The Board also believes that exploring additional strategic alternatives, in parallel to the execution of the management plan, is in the best interest of our shareholders. Separating our Alibaba stake from our operating business continues to be a primary focus, and our most direct path to value maximization. In addition to continuing work on the reverse spin, which we've discussed previously, we will engage on qualified strategic proposals."
That does seem like a dodgy way of asking for offers.
1. Activist investment firms use Yakuza tactics. They buy a small share and the company bends over backwards so the 'investors" get an extra percentage point instead of focusing on long term strategies.
2. If Yahoo had expanded on their Pipes and Konfabulator products and capitalized on people's uproar after iGoogle was shut down they could have been great competitors to Google's App Engine, Azure or Amazon Web services. Instead they focused on making the investors an extra percentage point by throwing the baby (great products) out with the bathwater (smart engineers that worked hard to deliver great products).
3. Investors and venture capitalists really don't know diddly squat (to put it mildly) about technology these days...
They take advantage of the rights afforded to them as owners of the company to push for change, whether you agree with their particular view or not. That's how corporate governance is supposed to work.
Though, not surprising that people on this board might prefer the "don't give shareholders any rights" model of Facebook or Google.
Why do you put "investors" in scare quotes?
Business 101 - the Assets of a company.
Machines: anything that enable the production of deliverables and thus, value.
Materials: raw materials (obviously), applicable for traditional industries. Solar and wind farms could qualify in the tech sector, tough.
Money: can also be shares owned, debts that others owe you, or future revenue.
Men: engineers, technicians - everyone that makes the company a business that makes money, and everything they know, including the company's past struggles so they don't repeat the same mistakes over and over again.
Being an investor implies that the people doing the investments have an actual knowledge not only of the current revenue sources of a business, but also its past history and its future potential, to be able to extract the maximum value from its operations.
Being an investor implies that there is a minimum amount of trust in what employees do, security in their past experiences as employees so that future mistakes can be avoided or mitigated, and faith in their future potential.
People who see employees only as expenses or numbers to be deducted from quarterly profits along with benefits, insurance, social security and other normal operational costs of the operation of a company do not deserve to be called investors for they have no plans for the future of a company and no interest either in the work of the employees or their success.
If they see a company only as a set of numbers and only focus on their returns, they fail to see the history, the potential and the future impact of that company. Thus they are more like vultures picking a rotten carcass than investors.
I'm done.
We really need some new words and some changes to the GAAP to make the distinction between productive investment for the future and aggressive asset sweating for the short term very clear to everyone.
* We just call it a dividend, or share buyback, or sell me your real estate in bulk so I can sell each piece individually and take the spread.
Personally I don't give a crap what those shareholders want.
There is more to a corporation that just shareholder value, and I don't particularly relish thousands of people losing their jobs so some people can make a quick buck.
How is it propaganda?
YHOO has a current Market Cap of 27.7B with assets including a 25B stake in Alibaba, 8B Stake in Yahoo Japan and ~4B cash. If it wasn't for tax implications of selling their investments, Yahoo's core business clearly holds a negative value. Accounting for tax implications puts it around 0-2B.
> There is more to a corporation that just shareholder value
Shareholders are who collectively owns a Corporation of which maximizing Share Holder value is its primary purpose and what the board gets elected to do.
$27.9bn (market cap) - $17.5bn (Alibaba) - $5.9bn (Y! Japan) - $5bn (net cash) = -$0.5bn (core Yahoo)
Here's a decent article for thought: How to really make America great again: Get rid of 'the dumbest idea in the world.' http://www.dailykos.com/stories/2016/1/31/1476239/-How-to-re...
No, it isn't. Corporations are given a public charter which declares its purpose. Increasing share-holder value is a nice side-effect at most.
Which, for virtually (but not quite entirely) all corporations that aren't nonprofits, is basically "do anything legal", or "do anything legal to advance the interests of the shareholders."
E.g., for Yahoo!, its purpose is "to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of Delaware". [0]
If corporate law required purposes in charters/certificates of incorporation to be meaningful and specific, and charters/certificates were denied or revoked that failed to be, the purpose in a charter might actually be worth referring to.
[0] http://files.shareholder.com/downloads/YHOO/1450374771x0x285...
Since we've chosen to give so much power to corporations over areas of our lives, they need to be good citizens more than ever.
It's quaint, but corporations are granted a charter by the state, and the people have delegated that power to the state.
So it's the people who decided what a corporation is and its rights and responsibilities.
Now of course we've been lulled into thinking it has to be the way it is now, and that the current state of affairs is 'natural', but it doesn't have to stay that way.
Maybe as more and more industries are disrupted and automated away and people lose jobs, we might be forced to rethink the current arrangement.
Rubbish, the board works for its shareholders who wants ROI on their investment. Who do you think is forcing their expenses / 15% workforce cut? and putting pressure on Marissa to waste her time/focus on re-structuring Yahoo to maximize their Alibaba investment? Shareholders are the primary benefactors.
Sure, but honestly most shareholders would prefer not to take a share of the profits. Dividends are so passé.
Today's modern investor wants growth, and the easiest way to get growth, without all the hard work , is to find another investor willing to believe in your portrayal of the value of the stock you hold[1], and to convince them to buy it from you.
Source - Yahoo Corporate Governance Guidelines - https://investor.yahoo.net/documentdisplay.cfm?DocumentID=11...
And even if it were, there are many ways to do that. And many of them do not involve short-sightedness with respect to the business.
If you're unhappy with how the business is being run, then sell your shares and get out. Quit bitching that they're not sacrificing the long term to give you an additional point.
The lie is when people say a corporation's purpose is to maximize profit, which it isn't.
The purpose of the corporation is to maximize the value to ownership, be that monetary or some other measure.
Step 2: see how people on step 1's answer make money.
Uh...what?
No one is making up those numbers. It's a financial metric.
She had a number of buzzwords laid out and did not give any idea of what they were going for. I need her to say things like:
1. We are working to create a cross-platform experience that outdoes Google and Apple within their app system. The best photo sharing program across app and web for me is Flickr and we are going to become the anti-facebook by guaranteeing your content privacy.
2. What is Yahoo? As it stands now, it is an amalgamation of multiple properties that bring in revenue streams. If this is the case, then if I were an investor, I would be trying to find a way to squeeze assets out.
I wonder what this Yahoo situation means for Firefox in the long run.
I think what we've seen is a complete failure to execute on any level. Compare that to someone like AOL who saw their brand tanking noticeably but intelligently diversified their business model.
I only used their Fantasy Football (US) and only for 2 seasons but it was head and shoulders above all others..including the NFL's own fantasy league.
They also have valuable properties like Flickr, Tumblr, etc., further down the page there are some very interesting propositions on how to make them work better, they might be better as spinoffs.
But I think what the people are reading between the lines is "if you decide to buy the majority share we will cooperate".
If Yahoo gets rid of the stakes in Alibaba and Yahoo Japan, then YHOO would properly reflect the value of core Yahoo, and someone with a few billions lying around could gobble it up.
Yahoo, after Marissa Mayer took over, also seems to have focused more on revenue from graphical ads compared to getting any revenue directly from users.
* Although mail may be a good product for Yahoo (as this article states), it's not really improved over time and has in fact gotten worse.
* The previous Yahoo Mail Plus, which was $20 a year for an ad-free experience with some extras (like POP email) was replaced with a who-would-even-want-this $50 a year ad-free option. Frankly, I doubt if many people even bothered to get this one, more so because among the people who started email with the likes of Hotmail and Yahoo, multiple email addresses were the norm (they continue to be so). For such users who stuck with Yahoo, there's no way to justify spending more than a hundred dollars a year for email.
* With no sign of IMAP in the paid option while Google has been giving free IMAP for years, Yahoo's offering in email was really substandard.
* Yahoo mail is still quite slow. Not the interface, but the backend. Sending a mail to oneself (by a CC when replying or emailing someone) still takes several minutes to show up in the inbox. In Gmail, this would be in the inbox in a second or two.
* Yahoo mail's spam filtering is many a times as bad as a coin toss. Emails that you mark as Not Spam for specific senders continue to go to the spam folder for subsequent mails from the same sender. Many emails that are true spam and have been marked as such don't seem to put similar mails in the spam folder.
* The vertical graphical ads on the right side, in an attempt to avoid ads from going off screen while scrolling through emails, are really annoying.
* Flickr, providing an astonishing 1TB of storage for "free" (with ads). The next paid option is $50 a year just to remove ads (double of what Flickr Pro used to cost). What???
* Any value assigned to user experience before was completely eliminated through these "more ads" move, where Yahoo was sure that almost nobody would opt for the paid options.
I wonder what would've happened if Yahoo had instead lowered the prices even more for an ad-free option, added some useful features (like IMAP in email) in a tiered pricing structure and made the product better (like handling email delivery quickly). Perhaps it's too late to wonder about these though. If Yahoo isn't bought by one of the top five tech companies, its products will likely disappear within the next decade.
I have $1. I can do many things with it. Why would I give my $1 to someone in exchange for a piece of their business if that business is not growing when I could instead give that $1 to someone who is growing? I want my $1 to become worth more.
Yes, yes yes, I know companies that pay dividends or profit sharing, etc. However what's the return on those? It is higher than somewhere else?
Divorce yourself from thinking about what the company does or ever how much money it is making. For many investors, they are looking for opportunities to put in some money, get an asset, and then sell that asset for a profit. Growth is key to forecasting returns and thus comparing different investment opportunities.
Then those investors should go invest in something else, and quit trying to push a bunch of shortsighted crap on a company.
That said, if a company doesn't want to be exposed to that sort of investor, then it shouldn't have done IPO and become a publicly traded company.
Not sure what guarantee I would have of a new company handling my web mail with same privacy regard.
LOL!