Yahoo is officially for sale | Hacker News Reader

Yahoo is officially for sale

mashable.com

192 pointsazov126 comments

Here are my thoughts on this: - Mayer's tenure at the helm of a big co like this is over, she will take a multi year hit before she resurfaces somewhere else (will take a while for her to get another CEO job)

- Yahoo still has tons of traffic (default browser tabs?), though the quality of it is questionable.

- If someone can pull a 1980s style buy and chop up and resell deal, they could extract positive value instantly. They are trading right now at a negative value to their cash.

- Can someone buy the company and then sell the email users to google? The search traffic to Microsoft?

- They are going to need to lay off thousands of people (many might be best off quitting now and beating the crowds to the market)

> will take a while for her to get another CEO job

Genuinely curious: Why would she get another CEO job (excluding startups and sinking ships)? There was no reason to think she would do a good job at Yahoo, she has no track record of success as a CEO, she certainly can't point to anything she's done at Yahoo, and as far as I can tell, people don't like working for her.

Because CEO jobs (as with most other valuable things in life) aren't doled out solely based on merit or track record. Mayer is one of the few women in a high-profile position in the Valley, and hiring a female CEO can be good for optics.

Agree.

Judging her on her track record would just be sexist.

To be fair most of the male CEOs get hired because of their story rather than raw skills. Honestly, the dye has been cast before Mayer entered the fray, but she cashed the hype and that was my only point of criticism. She will live to be CEO of another company and it could be sooner than most of us expect.

Was the die cast before Steve Jobs returned to Apple? I read it had less than 1 year of runway. I do not think Yahoo has ever been in such a dire position...

Steve Jobs was a rare talented individual who actually mattered in the CEO position.

Many CEOs have negligible impact.

It may be an arguable point, but I think at bare minimum she brings some value via bringing ton of cache and PR with her, so she may be a good fit for a small firm that could benefit from a lot of press and razzle dazzle.

She seems absolutely obsessed with the fashion industry (why did Yahoo need to open an office in Milan and spend $3 million sponsoring the Met Fashion Gala) so perhaps some sort of online fashion store would be a good fit, like Net-A-Porter, Shop Bob or Poylvore.

It would be extremely amusing if Mayer ended up running Polyvore, a Yahoo! acquisition that she has been criticized for[0].

0: http://www.businessinsider.com/eric-jackson-slams-yahoo-for-...

Too bad Camille stepped down, but I'm sure Rent the Runway could use some serious new talent.

Even if you think she failed, AND if you think this was her fault, she now has a LOT more experience at being a CEO than someone who has never been a CEO.

That's like saying "bet all your money on that horse, because it has lost a race and knows more about racing than a horse that doesn't race."

Seriously, it doesn't make sense. You can pick other people, who haven't been CEOs yet, but have shown potential. She never showed potential. Quite the contrary I'd say.

Running a company and running around a race track might be different sorts of skills.

Hmmm. Yeah unfortunately this isn't one of those "I just learned 1000 ways of how not to make a lightbulb" kind of things.

There aren't enough high profile companies for Mrs Mayers to expend until she acquires those skills, which we know she doesn't have. If for some reason she acquires them in the future, good for her. I wouldn't invest on that hope though, and you have no argument to convince anyone that they should.

In case you haven't noticed yet, CEOs and board members all appoint each other on various other corporate boards and in various companies.

Once you're in the inner circle, unless you messed up MAJORLY (i.e. bankrupted a billion dollar company), you'll always be able to get a new gig at some point.

Yes, it's not always a meritocracy - yes, that's how the world works. If I sit on a board, would I rather appoint my buddy, who will have my back? Of course.

As much as I think Marissa did a terrible job, she didn't pick the easiest company to become CEO of. Some CEOs have it easier than other; certain companies run on autopilot and have just a few major competitors.

I know and agree with everything you say. I was just replying to my parent who was trying to spin this as an advantage for Marissa, under the context of "all else being equal".

Under your context, which is indeed the reality, both my comment and my parent's comment are irrelevant.

Highly unlikely she will get another CEO job. She has made a lot of money from Yahoo and Google. She will most likely become a VC and funding startups that have design angle.

Why will she become a VC? So she can waste her money? VC has the worst returns out of any investment class.

If you mean invest other people's money as a VC, then maybe, but I haven't seen her show any interest in that.

VC is where high-profile tech execs are put out to pasture (see: Marc Andreessen, Dick Costolo, Reid Hoffman, Phil Libin, Peter Thiel). You won't see Elon Musk or Jeff Bezos becoming a VC any time soon (or probably ever).

And of course she will be investing other people's money, not her own.

http://www.bezosexpeditions.com/

Bezos runs a VC. (With Bezos, it's super dangerous to say he won't do X; chances are he's got a 30 minute meeting scheduled for 2am Sunday morning to review his X operation.)

Just because Bezos makes some investments doesn't make him a VC ('runs a VC,' as you put it, isn't the same thing and also isn't really accurate). His primary job is running Amazon, and the idea that he's got his hands in all kinds of pies ('it's dangerous to say he won't do X') is just an illusion he's been very successful at creating.

Online retail, cloud and networking services, original content creation, audiovisual content distribution services, video games, mobile phones, eBooks, audiobooks, video codecs, self-publishing, service marketplaces, freight/shipment services, money transfer services, grocery delivery...

I don't believe you are correct to say that Bezos/Amazon are only successful at creating the illusion of diversification. Amazon's encroachment into many different fields is baked right into the company's business model.

Source: I worked for Audible, an Amazon subsidiary, for four years.

... newspaper/website, rocket ships, ...

same issue as expert exchange url

We track his firm in our platform - they've made some pretty solid investments in the past two years and co-invested with some heavy hitters.

http://imgur.com/ZLmV68b

Biotech has some gigantic "early stage" raises - is that typical?

Yah, pretty common - very hard to get off the ground and require a ton of cash early, but boy oh boy when they pay out...

VC is what bored rich people do when they want to still feel relevant but not actually have to work any more.

I think more important is the fact that she probably doesn't need another job. She's worth $380 million apparently - why would she bother?

You'll be surprised. For some people $380m is not enough especially you know when Jack over at Twitter and Zucker over at Facebook have more money.

And Larry Ellison is worth what, 40billion or something silly? He still works like a beast at Oracle every day.

Working at the company you founded and is one of the most successful in history is a lot different than riding Yahoo into the ground and trying to find another gig.

It is not about the money anymore. That milestone was left far behind even before she joined Yahoo - she was worth $250M then.

It is about power.

Well, if she can't "get" another CEO job, she can just create one. She's got enough money and contacts to simply start her own company and be its CEO.

It is easier for a "failed" CEO to become CEO of a new company, than it is for a non CEO to become a CEO (of a publicly traded company of significant size)

Why would wall street value a company at less than its book value? Struggling to understand how that could make sense.

As an example - imagine a company with a billion $ in cash. If investors believe that the company will be wasteful with that money (for example by making poor acquisitions as is sometimes the case with companies with an excess of cash) then investors will value the company at less than a billion $.

I've heard it said that stock price is the market's best estimate of the NPV of future cash flows. If that's true, does that mean that the market expects some of Yahoo's cash to disappear? I can imagine ways that it could: lawsuits, golden parachutes, maybe even stupid acquisitions...

In general, though, the market is not as rational as it's credited with being. Perfect information never exists, and emotion can distort prices; think of Black Tuesday, or all stock-market bubbles, or how MLPs are falling right now because of problems with Kinder Morgan (which isn't even an MLP in the first place).

you usually bad mouth things you want to buy. it brings the price down.

One obvious reason would be if they don't trust the book value. For example, if the assumptions made in computing the book value are systematically wrong in some way.

Taxes. You might have to pay extra to convert assets into cash.

I didn't realize Wall Street had to make sense. Is that a new rule?

A lot of people believe in the efficient markets hypothesis

If you believe that they don't make sense, take the opposite position

> The search traffic to Microsoft?

IIRC Yahoo Search is powered by Bing so I'm not sure what MS will gain from that besides brand name

I think that deal was expiring, and they split revenue on that traffic with yahoo, 30% of yahoo's revenue comes from that deal. So could add a couple more Bs to Microsoft's top-line.

She's not getting another crack at CEO. She's done. She'll sit on a board or two, maybe.

I don't know about that. The business world tends to recycle CEO's like the NFL recycles head coaches. And for something of the same reason - some people believe it's better to hire somebody who's done a job and failed (and learned a lot about what went wrong and what to do better next time), as opposed to hiring somebody who's never done the job at all. Some look at it as "I'd rather hire somebody who got trained on someone else's dime".

I'm not necessarily endorsing this position, but I think it has at least some merit.

>Mayer's tenure at the helm of a big co like this is over, she will take a multi year hit before she resurfaces somewhere else (will take a while for her to get another CEO job)

That's a shame really, we need diversity in tech, and she could continue her excellent job in a company like Microsoft or Apple.

That would also help ending a monopoly, so everybody would win.

> That's a shame really, we need diversity in tech

Diversity for diversity's sake is not the goal (seems what you're implying, unless I misunderstood).

"That would also help ending a monopoly, so everybody would win." makes it sound like he was sarcastic, but I'm not sure.

I missed that part. I guess you're right.

Don't worry about Mayer. She can follow the path blazed by another bozotic Silicon Valley CEO and run increasingly high profile elected office. After all, if you can ruin a company, you can ruin a nation.

Didn't work for Carly Fiorna, either at HP, the Gov of CA, or her (now) failed presidential bid.

Perhaps they can go for joint speaking gigs[0], now that they both have plenty of free time on their hands.

0: http://fortune.com/2016/02/11/carly-fiorina-speaking-gig/

You forgot that Fiorina ran for the Senate (in 2010). It was Whitman who ran for Governor.

Touche, you're right, but still just further my point.

It's pretty unfair to say Mayer ruined anything. She didn't save Yahoo, but there is no evidence it was ever in a position to be saved by her.

If a pet rock was installed as CEO instead of Mayer Yahoo would be a more valuable company today. She didn't ruin it, but she sure helped shove it off the cliff.

That is a fairly extreme position to put forth as an unsupported assertion.

What has she done to provide value to Yahoo shareholders? She has had many failed acquisitions, failed to navigate the Alibaba situation to expectations, failed to stem the brain drain and even punted and hired McKinsey to help with her tough reorg decisions.

When Mayer took over Yahoo, it was a poison chalice. I don't think anyone could have turned Yahoo around unless they were truly exceptional. For the truly exceptional, Yahoo would give them little benefit and they could do better elsewhere (financially and recognition wise).

Mayer's performance had nothing to do with her gender. I'm adding this statement to respond to some other peoples' comments.

I also wholly agree that diversity for diversity's sake is idiotic. Can't wait to read The Verge and Ars Technica spins on this one..

I want to play devil's advocate here, just a bit. Looking at it solely from a stock price perspective, she's done remarkably well: the share price roughly doubled during her tenure there. Obviously there are a lot of other metrics to look at, but if you're a struggling company as Yahoo was, that's probably enough to consider hiring her.

Not to mention, I think a lot of people would argue that Yahoo was a sinking ship regardless of who was running it. She'll probably spend some time with her family, and eventually pop up at some other company that's looking to turn things around.

> I want to play devil's advocate here, just a bit. Looking at it solely from a stock price perspective, she's done remarkably well: the share price roughly doubled during her tenure there. Obviously there are a lot of other metrics to look at, but if you're a struggling company as Yahoo was, that's probably enough to consider hiring her.

She has done terribly. The stock price has little to do with her and almost everything to do with Alibaba. If you remove Alibaba she is now in control of a company worse less than its cash.

> She has done terribly. The stock price has little to do with her and almost everything to do with Alibaba. If you remove Alibaba she is now in control of a company worse less than its cash.

Wasn't that the case when she started, too?

One could argue that she was hired to fix that, though. And failed.

Sure, but when was the last time Y! had a successful CEO? Terry Semel before people he fell out of favor? Lasting 4 years is pretty good.

Tough to say, Alibaba wasn't public when she started so no one knew how much Yahoo's stake was worth. The stock had a nice period before the IPO when people who wanted to buy BABA shares instead bought YHOO because they were available. It didn't hurt that the market was red hot and there were huge expectations for BABA.

If you take out Alibaba, she has delivered net negative value.

You could have taken out the Alibaba share at the start of her tenure and that would be worth more than Yahoo today.

> She'll probably spend some time with her family, and eventually pop up at some other company that's looking to turn things around.

... e.g. Twitter

Why you think any other company would hire her to turn things around given her performance at Yahoo really baffles me? And you are even jumping the gun by suggesting the name of companies?!

Definitely not true. The only reason why stock has gone up is because Alibaba valuation went up during her tenure. It has nothing to do with Marissa. If you listen to her analyst calls, she keeps on talking about her Maven strategy and that has gone nowhere - wrt the rest of the market.

She could easily morph into a VC or professional board director, and make plenty of money without the headaches of being a public company CEO. She doesn't need the money at all.

The irony is despite the company sinking, Yahoo is still a great place to have on a resume, and boasts a loyal alumni network.

Facebook should buy them, and let advertisers target using FB targeting (the best in the world). It would be a huge new acquisition channel for a lot of direct response orgs.

You can't just say something is the best in the world (its not) without qualifying it at all. Yahoo advertising is some absurdly small amount compared FB, Google, or even Bing.

As you say, the big platforms are FB, Google, and Bing. The only non intent driven advertiser on the big list is Facebook for a reason. According to this list, https://www.quantcast.com/top-sites, Yahoo traffic is not insignificant compared to FB at all. With FB's targeting, Yahoo could be monetized soo much better.

Most direct acquisition marketers I know would say that Facebook is the main scale player in non intent driven advertising, all because of its superior targeting.

While it sounds like the beginning of the end of the early internet era I for one am excited at the thought of a company being able to do something a little more remarkable with the infrastructure Yahoo has built.

So here's a potentially dumb question. A lot of commenters are expressing optimism that a company could buy Yahoo and do something good with it.

If that's the case, why can't Yahoo do something good with itself? If all it takes ("all") is dropping the parts that aren't profitable, why can't Mayer or some other CEO do that?

What's the real benefit of another big player buying Yahoo, if Yahoo couldn't save itself? What's the real hope there?

I don't think there's much saving Yahoo in its current form. It's just all over the place as to what it's doing (media, search, email, odd sorts of services like Flickr and Tumblr...). I just don't get how Yahoo even survived this long. It seems to me it's just a fluke of the market I feel.

Yahoo is in such a strange position, in that they have a lot of great products, users and revenue and at the same time I can't think of a single big player that would want to own them, let alone for a fair price.

> they have a lot of great products

They do?

I'd be interested in hearing what other people think of as Yahoo's great products. I personally like Tumblr, but I'm having a hard time thinking of another Yahoo thing I like/use

Flickr springs to mind. Still the default choice for a lot of serious photographers.

TL;DR: just a rant, about that flickr feels to be plateaued and better options are rising, even though it's still rather good platform to keep and share your photos.

Flickr is great (with its 1TB of storage), though I recently tried to join '500px', since then flickr looks like desert with tumbleweed. It's a bit of exaggeration, though 500px is way more exciting, your photos are more easily shown to the public. People are encouraged to rate each other, etc. Also it has a marketplace. All in all 500px let's to improve my photography, whereas in flickr 90% people who've seen my photos are people, to who I've shown them. Also flickr's home page have the same set of pictures on carousel for weeks, where in 500px it's always fresh.

Interesting - I'd not heard of 500px. Will check it out: my primary concern with Flickr has always been that it doesn't really enable discovery.

Mail, Flickr, Rivals, Tumblr, Finance, Fantasy Sports...

Another vote for finance. It may just be familiarity, but I still prefer it to Google finance.

YQL can also be handy for some things. Yahoo site search "BOSS" was actually quite good too, but apparently was just discontinued (although apparently they have an alternative).

Their fantasy sports is probably the best. Sure ESPN exists, but Yahoo has dominated that market for some time.

Yahoo Sports, Yahoo Fantasy Sports, Flickr are all great.

Yahoo Sports has some of the best NBA and NHL writers in the business.

Yahoo Finance and Fantasy Sports are pretty darn good, widely used, and have good reputations. I'm sure there would be no shortage of suitors if they were sold off as independent verticals.

Gannett Co., the media company, was in a similar predicament recently.

Its broadcasting and digital businesses were doing OK, but its print publications were in horrible shape.

So it split into two companies: TEGNA (TV/digital properties) and Gannett (newspapers).

In Yahoo's case, its stake in Alibaba was propping up the company. Now that Alibaba is a separate entity, I imagine that we can learn a lot about what Yahoo's fate will be by watching how Gannett has operated since its spin-off.

Interestingly, since the split in July, Tegna shares have plummeted after an initial small rise, whereas Gannett shares have remained roughly even:

https://www.google.com/finance?q=tgna%2C+gci&ei=DF3HVvjMA4Tk...

Yahoo still has a lot of potential if someone knows what to do with it.

Yahoo is a portal with email. It's the browse/discover counterpart to Google's search. With all the traffic and infrastructure it has, it can definitely turn into a great ad network play and offer another option in the cloud productivity business. Just need to shed all the deadweight and ridiculous business ideas while improving quality of both content and ads back to where they were before.

Yahoo has a deal with AT&T to provide web email service for them. I have an account that dates back to SBC and hope I don't lose access to it. I have my bank and other stuff going to that email. If Yahoo sells their email service I hope I can still access my email account. This will effect a lot of people if they start shutting down old accounts.

Already Yahoo Mail requires a mobile number to sign up for a free account and not everyone has a mobile number.

I work at BitTitan.com an email migration company. If you'd like to get out in front of this, shoot me an email and I'll help you get your email into another mail service. NickJ@BitTitan.com

I registered my email with so many services, that if I changed my email to a different one I can't change my email on each account because I got some I can't remember.

Is your service free?

Me too, unfortunately can't help you there, but this will make your data redundant if you're concerned about data loss.

It's not free, but yours is on me. I landed in my current role after meeting the founders at an HN meetup and like to give back where I can.

I dunno, honestly I think she failed on the e-mail overhaul. Did they actually get more users, or make existing users happier? Or use e-mail to drive traffic to other products?

I have a Yahoo mail account, and it seems like it looks a bit different, but not even good. And it's kinda unreliable still. It seems worse in all respects than Google's offerings.

As far as I know, back in 2012 she was saying "Yahoo has e-mail"! If that was the centerpiece of her comeback strategy, and it was so poorly executed, that doesn't leave me with a great impression.

So meta, watching their stock chart on their portal: http://finance.yahoo.com/echarts?s=YHOO+Interactive

I hope Yahoo Finance and sites like Flickr stay around - they are quite good.

Yahoo still serves ~12% of all search engine traffic in the US. I'll bet you Google and Microsoft are going to be fighting bitterly to buy the right to redirect that traffic to their engine.

Well, it's already sort of Microsoft's share, since Yahoo! is powered by Bing.

I believe the advertising revenue (which is what really matters) still goes to Yahoo though. That's what Microsoft would be after.

Yahoo Search and (most of) it's ad network are already powered by Bing. You can bet Microsoft will be scrambling to ensure at least those portions of Yahoo's properties stay out of Google's hands. Not only would they see an immediate drop in ad revenue from the loss of volume itself, but a large drop in volume would also cause many PPC marketers to reevaluate if it's worth the overhead to even manage campaigns on the Bing network in the first place.

Even if they don't buy it directly, they're likely to try to get it in the hands of a company that will keep the current Yahoo-Bing agreement in place.

No they're not. Yahoo's results are provided by both Google and Bing.

>In October, the Company reached an agreement with Google that provides Yahoo with additional flexibility to choose among suppliers of search results and ads. Google’s offerings complement the search services provided by Microsoft, which remains a strong partner, as well as Yahoo’s own search technologies and ad products.

Oh, that's nifty to know! I haven't managed campaigns in the last ~6 months so hadn't kept up with the news changes. Makes a lot of sense now on why they pulled part of their ad inventory out of Bing back to a Yahoo-specific management platform.

Is Yahoo still the default search engine for Firefox?

I wonder how this will affect Mozilla, since the search engine deal.

Mozilla earns about $300 million a year from their deal with Yahoo. The deal runs for five years from Dec 2014 through Dec 2019.[1] When the money from Yahoo runs dry Mozilla will have to go back to Google or Microsoft for a new search deal which will bring in much less than before because Firefox browser share has been falling about 3.7% a year since 2010.[2] Mozilla will be forced to shutter projects and shed staff.

[1] https://blog.mozilla.org/press/2014/11/yahoo-and-mozilla-for...

[2] https://en.wikipedia.org/wiki/Usage_share_of_web_browsers#St...

What are the key Yahoo assets? Finance, Sports, Mail for sure. Maybe Tumblr?

Its biggest asset is $30B worth of Alibaba. However, Mayer stated that she wants to separate that from the core of Yahoo operations, so it might not factor into any sale deal.

Fantasy Football

People say that Mayer won't get another CEO job, but I wouldn't be so certain. There's a lot of defenders for her in the tech industry who just attribute her failed tenure as Yahoo being Yahoo. Plus, she has a lot of money and executive connections.

And if Fiorina could be CEO for two companies over a longer time than Mayer's tenure at Yahoo, well...

I would say Yahoo is not yet a massive anti-capitalist prank of a company like Radioshack, but I would say it is reminiscient of blockbuster. August 29th, 1997 Netflix was founded and on Aug 31 of 2011 Blockbuster announced no one wanted to buy an asset that was pretty much a ton of rent obligations to strip malls, and millions of DVDS & VHS tapes.

However, the Yahoo assets are actually reasonably valuable and if they backout alibab it could be a good pickup for someone who was clever enough to use it.

I bet a network or a studio buys them as a content platform for their content. Include some built in users too.

Something I feel like people miss in conversations about M&A is that companies are valued in large part against their existing revenue. A studio looking to buy Yahoo for their content platform is also buying a search provider. That search provider accounts for a full third of Yahoo's revenue! You can't just buy Yahoo and kill off search, unless you want to pay a gigantic tax for the content platform.

It's not rare to spin-off/resell an unwanted part of a business after an M&A, assuming the company is not up for sale by the slice in the first place.

A studio could buy Yahoo for their content platform and either spin-off the search platform, more likely try to resell it to either Microsoft or Google. Of course it's easier said than done...

Yahoo hasn't been a search provider for six years. They resell Bing.

I chose the words "search provider" carefully.

In any case, the point stands: a studio buying Yahoo almost certainly doesn't want to expend time and energy maintaining Yahoo's foothold in Internet search. But that part of their business isn't for sale independent of the search business unit.

Are there networks or studios large enough to even consider it? Seems like Disney is one of few, and it's still doesn't make a lot of sense.

Viacom and CBS Corporation are two media conglomerates that I could see buying.

Viacom is making a huge push for mobile and digital content delivery, and has a treasure trove of content that hasn't seen much availability on services like Netflix. CBS already owns questionable web properties via its CBSi branch (CBS Interactive, which owns CNET and other horrible properties.)

So, how will this affect Mozilla? Out of money soon? It really looks more and more like 2 dying companies are going together to their doomsday party.

https://www.youtube.com/watch?v=u5HOt0ZOcYk

Yahoo is one of those companies in which I don't really know what their core product is anymore. Similar to Blackberry.

Dear Writers,

Stop using the term "activist investor". It strongly connotes political and social change.

That is not your intent. Find better words.

Sincerely,

It's a term that has been used for a few years. It does not connote political and social change -- you are foisting your narrower understanding of the word 'activist' on to it.

Dear Reader, please consider reading some financial journalism to familiarize yourself with common idioms.

It smells weird. Yahoo still has a lot of assets, and it is making money. Why suddenly for sales? Only Wallstreet greediness can explain this for me.

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