Investors Value Yahoo's Core Business At Less Than $0 150
An anonymous reader writes "Yahoo is most known for its search, email, and news services. But its U.S. web presence is only part of its corporate portfolio. It also owns large stakes in Yahoo Japan and Alibaba (a web services company based in China). Yahoo Japan is publicly traded, and Alibaba is heading toward an IPO, so both have a pretty firm valuation. The thing is: when you account for Yahoo's share of each and subtract them from Yahoo's current market cap, you get a negative number. Investors actually value Yahoo's core business at less than nothing. Bloomberg's Matt Levine explains: 'I guess this is fairly obvious, but it leads you to a general theory of the conglomerate discount, which is that a business can be worth less than zero (to shareholders), but a company can't be (to shareholders). ... A fun question is, as fiduciaries for shareholders, should Yahoo's directors split into three separate companies to maximize value? If YJHI and YAHI are worth around $9 billion and $40 billion, and Core Yahoo Inc. is worth around, I don't know, one penny, then just doing some corporate restructuring should create $13 billion in free shareholder value. Why not do that?'"
Re:Yahoo does make money. (Score:4, Interesting)
I don't think that it is coincidence that, whenever someone I know gets their email hacked and used to send SPAM, they are using Yahoo mail.
There was an issue disclosed a few months ago which related to stealing Yahoo credentials -- I suspect there are others. It's either vunlerabilities at Yahoo or there is something about the type of person who uses Yahoo mail.
Re:Yahoo does make money. (Score:2, Interesting)
Yahoo could have been google. You could even argue it SHOULD have been. They could have been ebay. Or facebook. Or myspace. Or youtube. Or any number of now massive internet giants.
Yahoo is old enough to have been any of them. Or even ALL of them combined.
But somehow. Thru skill and cluelessness. They missed every single money train.
They had to work hard not to be a success. And thats why they get ragged on.
Re:News flash: Marissa Mayer is useless. (Score:2, Interesting)
Shit, I thought that was Mayer's strategy.
Look at the spambots all over the Yahoo finance message boards. Yahoo never acted promptly on abuse reports, and thanks to AJAX, reporting spammers is a 5-click process - and also thanks to the AJAX redesign, the spams remain visible when you place the spambots on your ignore list.
And then there's Flickr. And YahooFail, I mean Mail. All decent Web 1.0 apps that got reduced into uselessness by the UX crews.
The purpose of Yahoo's string of redesigns is to give the semi-talented folks who are still there, but bored to death, the training they need for their next jobs. Yahoo's set of properties was done, they could have milked that userbase for ad impressions for years. By letting the UXtards run riot over the site, they destroyed their remaining customer base. Good riddance to them all.
Re:News flash: Marissa Mayer is useless. (Score:5, Interesting)
Can it be saved?
Short of a 2nd Steve Jobs type of CEO there is nothing left to do but sell.
I do not think Marrisa is bad. The fact is Yahoo was the leader in search, chat, groups, news, and media integration at the turn of the century. THey let it all go to shit soo bad that they can't recover.
1. Yahoo chat rooms rocked as well as AIM in 2000. THe porn spammers came in and ever 30 seconds even kids room got spammed. In 2009 I went back 9 freaking years later and all were porn BOTS!! No one did anything.
Seriously. I would have stopped this within days if I were Yang back then as people would leave and get freaked out and do not want RUssian porn spams every 30 seconds.
Skype now has audio, vidoe, calls, etc. Google Chat has this plus Google+ integration in it's own version.
2. They missed the mobile presence. DONE. THe market is made up of two. Apple and Android. No more no less. Windows Mobile is pretty nice and trying now but it is just too little too late and if Microsoft can't even get it you know you are in trouble being much smaller.
3. THe search sucked. Excite then lycos, and ultimately Google came in with intelligent data mining searches rather than just do a search for text like Yahoo did. When they got beat they shrugged their shoulders like they did with the porn spam bots for many many years and then act all shocked when everyone left?!
4. The site redesign is made for old people who do not like change or details. Old people rarely use the net more than looking at a news story or two and sending messages to their grandkids on facebook. Yeah lots of views there even if that is their demographic now.
5. They let websites like 4chan and drudge take over younger people's audiences.
6. THeir answer to livejournal and facebook was Yahoo360??! Please by 2006 it was too late.
Google deserves all of its fame. They delivered a supperior product and kept improving it at a rapid place and viewed complacency as an emeny. Google made sure they had a marketing. They also went into newer markets first before a threat could come in.Yahoo did the opposite.
I blame Yang the founder for its issues.
Yahoo needs to invent something out of this world now just to keep up. A new CEO can only do so much for places like Yahoo, Kmart, JCPenny, and other has been companies beaten out by nibble competitors. I guess like kmart you can't compete after a Walmart came in and even Target to a lesser extent.