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Yahoo CEO Jerry Yang To Step Down
Posted by
kdawson
on Tue Nov 18, 2008 03:01 AM
from the dude-where's-my-stock dept.
from the dude-where's-my-stock dept.
JagsLive was one of several readers to point out Jerry Yang's departure as Yahoo CEO. He's not leaving the company; he will return to his former role as Chief Yahoo, whatever that entails. Yang has been under fire in recent months from investors for his handling of Microsoft's recent acquisition attempt."Yahoo, under fierce financial pressure, has begun a search to replace company co-founder Jerry Yang as chief executive, the company said Monday. 'Jerry and the board have had an ongoing dialogue about succession timing, and we all agree that now is the right time to make the transition to a new CEO who can take the company to the next level,' Chairman Roy Bostock said in a statement."
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Isn't it kind of sad (Score:5, Insightful)
And here I thought (Score:3, Insightful)
Re: (Score:2, Funny)
Re:Isn't it kind of sad (Score:5, Insightful)
Well, in the case of Yahoo, sure, they've already gone public. But for startups? Getting acquired is the dream. You don't have to deal with those bastard accountants, and everyone gets a payout.
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Re:Isn't it kind of sad (Score:5, Insightful)
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Re:Isn't it kind of sad (Score:4, Insightful)
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Re:Isn't it kind of sad (Score:5, Insightful)
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That is incorrect. (Score:3, Insightful)
Most companies' business plan involves serving their costumers.
If shareholders like the respective business plan then they invest in the company and share the rewards, but the focus of any company should be costumers: they are the people that make the company viable.
Re: (Score:3, Insightful)
Nope, companies are there for offering goods and services, which means, they should concentrate on serving their customers, not their shareholders. If capitalist principles hold at all, a company that serves its customers well should of course make money, which, in turn, should result in higher returns for the shareholders.
Saying that companies are there only to serve their shareholders, that is, only to make profits, is just a justification for all sorts of dirty business practices. If all you have to do i
Re: (Score:3, Interesting)
Re: (Score:3, Insightful)
Of those three, I'd say investors are the least necessary, since a company could grow (however slowly) without borrowing.
Is it possible to pack more fundamental misunderstanding into a single sentence? I will leave it to others to point out what needs pointing out.
Wow, just wow.
Re: (Score:3, Insightful)
Of those three, I'd say investors are the least necessary, since a company could grow (however slowly) without borrowing.
Do you count the founder as an investor? Somebody started the company, and if they did not borrow money, they invested their own. And because they were the only investor, they are the only shareholder (but a shareholder nonetheless).So even if the company does not borrow any money after the founding, they are still responsible for enriching the owner.
Things like serving your customers well and treating your employees good might not make much money in the short run (maybe even cost you), but they build goodw
Re: (Score:3, Informative)
Saying that companies are there only to serve their shareholders, that is, only to make profits, is just a justification for all sorts of dirty business practices.
You may not like it, but that's how the world operates. People who invest their money (investors / shareholders) are the primary focus of the company. Customers really exist only to help the company to make money. Anything that is not illegal is allowed and is expected to be done if it furthers the goal of making more money. In fact, if the bus
Re: (Score:3, Insightful)
I'm glad to see you got my point completely. Indeed, it is exactly this state of affairs you describe so well that worries me so deeply.
Anything that is not illegal is allowed and is expected to be done if it furthers the goal of making more money.
If I'm reading well, what you're implying here is that all ethical and moral concerns you may have about a particular action should be ignored as long as this action increases profits. This is, once again, the logic behind such tragedies as Union Carbide's disaster in Bhopal, India. [wikipedia.org] I'm pretty sure Union Carbide's behavior was not illegal according to Indian law, but I'm al
Re:Isn't it kind of sad (Score:4, Interesting)
What you are missing is the shift that has occurred as to who exactly the customer is. Now days, for most large corporations the customer is the stock holder. We, the consumers are the product that is being sold. With Yahoo, Google, MSN etc. it's about how many eyeballs they have looking at their pages. For companies such as Ford, GM, Target, WalMart it's all about the size of their consumer base. That's why Ford and GM don't spend a lot of time building cars that tomorrows consumers might want. Their only focus is to build as many of whatever cars the consumer is buying today.
In this new world, as far as the corporations are concerned we're just a bunch of whores and their all fighting to see who is going to be our pimp.
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Re: (Score:3, Insightful)
That's why Ford and GM don't spend a lot of time building cars that tomorrows consumers might want. Their only focus is to build as many of whatever cars the consumer is buying today.
I'm sorry, but the logic doesn't follow. Ford and GM do exist to give a return on stockholder's investments, but going out of business is not in stockholder's interests. Therefore, they are short-sighted and struggling not because of their intention to be profitable now without regard for the future, but simply because they are slow and mismanaged. It's not any more complicated than that.
Normal rules of capitalism apply: generally, you will find that the interests of consumers and stockholders are act
Re: (Score:3, Funny)
We can only hope Brainsuck Industries will synergize with them.
Re:Isn't it kind of sad (Score:5, Insightful)
Microsoft offered $33 per share - the yahoo share is now around $10.
If I was a shareholder I'd be pissed as well.
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Re: (Score:3, Informative)
S
PPS is $10 a year for 10 years more or less than $33 one-off? Yang was looking for the 10-year payoff, not the August one.
Except that it isn't $10 a year for any length of time, the $10 share price is a once and done deal (once you sell your share for $10, you don't have it anymore). It was $33 one off when MS made their offer, and now it is $10 one off on the open market.
Euphemism (Score:2, Funny)
"...a new CEO who can take the company to the next level"
So they're not even trying...
Dividends? (Score:5, Interesting)
I just looked at the YHOO numbers and noticed there is no dividend. Watching some prophetic videos of Peter Schiff [youtube.com], he seems to be saying that every American stock is basically a speculative gamble, and that there is no place to invest in a company with a real balance sheet in the states.
Can anyone "in the business" comment on what he's saying? Is there a possibility of returning to the more formal method of investing as a stake/stockholder and receiving a share of real profits?
Re:Dividends? (Score:5, Insightful)
No- because investors today think the stock price means everything. Played that way, the entire thing is a giant pyramid scheme waiting to collape... oh too late.
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Re:Dividends? (Score:5, Interesting)
Can't watch video since I'm on a machine without flash (or sound for that matter), but it's Schiff.
So he'll be pointing out that the US economy is fake, that it's all borrow and consume, and the US dollar is set to drop by a huge amount. And hence you should invest all your money overseas, via his firm of course.
He's basically right in principal, though I think he underestimates just how badly the US bursting will hurt the rest of the world, and he doesn't seem to notice that the US housing bubble is a dwarf compared with the UK... On Asia he's probably right, for the end game anyway.
Owning "growth" stocks that pay no dividends is gambling pure and simple. See Enron for how easy it is to create phantom earnings - it's a little harder to do so when you have to pay that dividend out... But that isn't US specific.
I would expect Schiff to not have any huge problems with US miners (of all sorts), US agriculture, and US oil companies. He does have the reverse of the norm view that the US has more "government risk" than other countries.
As in the US is more likely to declare a "windfall profit tax" and steal your dividends when those companies do very well as the domestic economy collapses or to simply confiscate your gold, etc than say China is. The really sad thing is that he's probably right on that one...
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Re:Dividends? (Score:5, Informative)
Only very few tech companies that are huge and have been around forever pay dividends. The only examples I can find in the tech sector that pay dividends are IBM, Intel, Sony and HP.
The entire point of a publicly traded company is to increase shareholder value. One easy way to do this is to simply give the share holders money in the form of dividends. The other choice is to invest back into the company. If the company is still growing then there's a good chance that investing $X million into R&D/employees/capitol improvements/whatever will result in the company improving it's market capitalization by more than $X mill. If that's the case, then that produces more value for the shareholder and is the proper choice.
Basically dividends, and stock buy-backs which are effectively the same thing, are an easy way out when a company has more money than it knows how to make useful investments with.
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Re: (Score:2)
Nokia also pays dividends. I know as I was on the receiving end for a few years.
Re:Dividends? (Score:5, Insightful)
Or basically dividends allow your investors the option to take part of your profits and either put them back into the stock or use them for income or other purposes.
One symptom the lack of dividends leads to is companies feeling compelled to branch out in order to make use of the money they have on hand; they usually aren't as good at their new tacked-on field, and the formerly well-focused company that the investors bought into no longer exists.
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Re:Dividends? (Score:5, Informative)
I'm not sure what your question is really about. Certainly many companies -- and nearly all that have been around for any length of time -- are profitable. Yahoo is quite profitable, generating over $600M of profit last year. So in that sense I'm not sure what you mean by "speculative gamble". Yes the market moves quickly and companies' fortunes can rise and fall, but it's been that way since capitalism was invented.
With regard to dividend payouts. In a high-growth company, the investors often prefer the company to retain earnings to fund future growth opportunities. When there aren't enough high-value growth opportunities and the cash starts piling up, usually companies will then start paying dividends (Microsoft, for example).
Because of US tax law, it's actually better for most investors if the company uses extra cash to buy back its stock (thus reducing shares outstanding, and increasing the price of the shares that remain), rather than pay it out as a dividend. The former results in a capital gain, which presently in the US is taxed as low as 15%, while the latter counts as ordinary income. Many companies do stock repurchases, sometimes in addition to dividends: Intel and Microsoft for example. This is another perfectly legitimate way to give money back to the investors.
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Re:Dividends? (Score:5, Insightful)
If the companies don't issue dividends, the only reason to buy its shares is to sell those later, at a profit. That is a Ponzy scheme, it works on times of inflation and that's all, without severe inflation, if fails. Now, when the companies issue dividends, they can be avaliated on a P/E basis, and bought because of those dividends. There is no need to resell the stocks in order to make profit. That is a stable market (that can become a ponzy sceme sometimes, but doesn't need to be one).
That the US government encorages the first, and not the latter, tells a lot.
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Re: (Score:3, Insightful)
But you are forgetting that they may not be paying dividends now, but they can always choose to do it later. And this choice is really made by the stockholders(Maybe indirectly by voting for the board).
If I own 10% of a company with 10 million in cash, then the value of my investment will be at least a million, even if the company is not currently paying any dividends.
So you may think of the value of a stock as the ability of the company to pay dividends. And if they choose not to do it now, it is in a way
Speculation and Investment (Score:2)
First off, I watched that video, and Peter Schiff's comments, while prescient, did not call "every American stock" a "speculative gamble." His comments mostly had to do with the unwinding of the credit and housing bubbles, and what little reference he did make to stocks were with respect to financial companies, and with respect to those, he was of course right.
Financial companies' balance sheets are notoriously tough to understand and far from transparent. Go look at a company AIG or Goldman Sachs's 10-Q,
Yahoo is... (Score:3, Insightful)
Something everyone always forgets, or just ignores (Score:5, Interesting)
Jerry Yang was never meant to be Yahoo's CEO.
He took ever when Terry Semel took a gigantic shit on the company. He failed to act on Yang's and Filo's suggestion that Yahoo acquire Google when that was still possible. This was when they were still using PageRank, prior to their major search engine acquisitions. I rememnber at the time that this was going on, I was constantly talking to Yahoo people about how much sense it made for them to do so. I also remember the looks on their faces when they all came back with "Semel's not going to do it." He also amassed a private fortune at the company's expense while letting Yahoo go down the drain.
They kicked him to the curb and fell back on Yang as interim CEO. He finally stuck to the position when it looked like that was all that would keep the shareholders happy. But it was simply never supposed to happen.
If I blame Yang for anything, it's for ever letting Semel head the company in the first place.
bye bye (Score:2, Insightful)
Re:bye bye (Score:4, Funny)
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Now all competitors know that Microsoft as a business is going to die. Because the main cash cows, Office and Windows are under fierce attack.
Your statement is correct insofar as all things happen if given an infinite time span. Excluding an infinite time span, your statement is really, really reaching.
Office and Windows are huge cash cows for Microsoft. Office alone commands more than 90% of all office productivity software in the world. If you think that's going to be replaced en masse by OpenOffice or Google apps anytime soon, you're delusional in the extreme. It may work fine for you, but the vast majority of the business world does not a
I've been cheering his rejection of Microsoft... (Score:4, Interesting)
...and I hope I'm not the only one. I actually use Yahoo Shopping on a regular basis, but if Yahoo were acquired by Microsoft I'd stop immediately, and find an alternate vendor-aggregator. Just a matter of principle (and maybe as much aesthetic as anything), but Microsoft just icks me out.
Kinda funny because it troubles me little to support an empire which would probably be just as evil if it had the same amount of power, Apple's. But Apple has an aesthetic sense, and has thus slipped perhaps-irrationally behind my defenses.
This whole Yahoo mess is also a fine example of the downside of going public -- you have amoral raiders screaming the battlecry "shareholder value" and using that to bludgeon anyone in a company who makes a principled decision which might not maximize stock prices in the short term.
(Mod me +2/-1 incoherent?)
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I really hope they make it.
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Yeah, I've got two Yahoo email accounts I've had since the Nineties (they said they were for life, I hope they meant my life, rather than their life...).
I like the Yahoo Mail interface, even more than the Gmail one in many respects. I've got a stack heaps of old emails (dating back 10 years almost).
But if Microsoft bought up Yahoo, I would be out as soon as I could.
Luckily I have access to POP for Yahoo, so I could just download all those emails that way (I should do that anyway...). (For those of you who h
Re:I've been cheering his rejection of Microsoft.. (Score:5, Interesting)
It's all well and good when there is any "long term" to think about... but in the case of Yahoo, there's simply none. So it was a bad decision no matter how you look at it.
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Re:I've been cheering his rejection of Microsoft.. (Score:4, Insightful)
I look at it from the point of view of a Yahoo user (of various services) and I feel it was a great decision. Yahoo isn't going anywhere - they are a PROFITABLE company, even if they don't rake in billions per quarter. a few hundred million bucks is nothing to sneeze at.
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Re:I've been cheering his rejection of Microsoft.. (Score:4, Insightful)
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Re:I've been cheering his rejection of Microsoft.. (Score:3, Insightful)
Considering the reaction of Microsoft stock during the acquisition period, you're joined by a lot of Microsoft shareholders.
I think trying to acquire Yahoo was more about Steve Ballmers ego needing some marketshare against Google, rather than any form of sane business for either company. I suspect Ballmer got told by the board to concentrate on core business instead of his ego, hence the abort of the takeover.
Apart from some speculators who've gotten what they deserve, it'
Re:I've been cheering his rejection of Microsoft.. (Score:3, Interesting)
...and I hope I'm not the only one.
No, you're not. I like Yahoo the way it is now. Just as I liked Hotmail the way it was before Microsoft fucked it all up. Sadly, many current Hotmail users have no clue that there was a time when Hotmail was streamlined, efficient and uncluttered. It ran on FreeBSD. It just worked without sucking.
Microsoft added the suckage to Hotmail, I am sure they'd manage to do the same with Yahoo.
He's so screwed! (Score:4, Insightful)
Should have sold it back when M$ was offering $33 a share. It's kinda pathetic he had to beg M$ to buy now. I don't think he has done enough "plan B" for Yahoo as a company. It doesn't take a genius to predict that regulators in US won't be too happy with this kind of merger with Google.
0 result (Score:5, Funny)
"Your search did not match any documents."
Why aren't shareholders suing? (Score:5, Insightful)
In hindsight shareholders have lost $20 billion. At the time of the offer the premium was around $10 billion. Astronomical numbers to waste just so a board of directors can maintain their personal wish to remain independent.
Its an indictment of the USA's corporate law that shareholders have not sued for breach of fiduciary duty. If they can, but haven't, well they deserve all they got.
Jerry Yang - good riddance. Just becasue you can create an online yellow pages in your garage, (and get very lucky), does not qualify you to run a billion dollar company.
Jerry is too nice to be CEO (Score:5, Insightful)
I know Jerry and he is smart and insightful, but way too nice to be a CEO in an industry where he has to compete against SOBs like Ballmer and Schmidt. Jerry is polite and considerate. He is thoughtful and modest. The other guys are rude, arrogant, aggressive, nasty folk.
Jerry did a lot of useful changes, but what he didn't get that it is all about perception of being a leader and being on the path upward. A lot of the issue for the market is PR versus reality. And, let face it, search and search advertising are the things the market views as keys to future success and Yahoo has fallen further behind in this area. The decision to outsource search to Google by Yahoo may prove to be one of the top 5 greatest business mistakes of all time and Jerry has to share blame for that as well.
Jerry didn't move boldly enough, but his Board should have known that his base style wouldn't allow it. He should have reorg'ed immediately and publicly, giving folks ownership and accountability. You get the job but you get fired if you don't hit the goals. He let key services stagnate. Yahoo mail took too long to fix their UI to match Google and Yahoo still charges for POP access. Yahoo was the calendar leader, but Google launches a slightly better calendar and is viewed as the leader, even without a customer base. Yahoo Groups is a leader but is old and stale compared to something like Ning. There are lots of examples of how to upgrade their services out there for Yahoo and they seem to ignore them and let others steal mind share and leadership from them.
I fear that it is too late. Yahoo is the AOL of Web 2.0. It is only a matter of time.
Re:Jerry is too nice to be CEO (Score:4, Insightful)
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Ya...what? (Score:4, Interesting)
I'm a former "Yahoo", and I've got to say that I spent much of my time hoping someone would buy the company, if only to mindwipe the boneheaded middle and upper management.
They could've been the AOL in an AOL/Time Warner sandwich — that "gem" that someone else paid too much for.
Now? Forget it. I did.
Yahoo search surrendered the search biz when they agreed to send search marketing results through google. Even with the Department of Justice shooting that down, well, it's a hell of a statement when even your competitor chooses The Other Guy.
Can't sell advertising (Score:4, Interesting)
Yahoo's problem is that they can't sell ads. Few companies want to buy ads on #2 or #3 when they're so far behind. That's the killer. Yahoo outsourced most of their ad operation to Google, which, over time, dooms them to irrelevance. Even Google's ad operation is in trouble. [alleyinsider.com] Online advertising is flat and has probably peaked. Google is no longer a growth stock.
Once you reach a certain level, search quality doesn't seem to affect market share much. Yahoo's search engine is fairly good. For about half of 2007, it was better than Google's. Yahoo had added all those specialized subengines (weather, stocks, celebrities, etc.) and Google had to catch up, which they did by late 2007. Yahoo's market share did not improve while they were better than Google. Search quality does matter if it's awful (see Cuil [cuil.com] and Rushmore Drive [rushmoredrive.com]), but once over the entry threshold, further improvements don't seem to affect the bottom line much. Advertising targeting matters more.
Yahoo still tries to be a "portal", but does anybody still use Yahoo as a home page other than people who somehow got it installed with their browser and doesn't know how to change? The trouble with "portals" is that the targeting is terrible; when the ads are displayed on the home page, the portal has no idea what the user wants yet.