Jerry Yang’s spin campaign about why the Microsoft bid fell through is transparent. He’s not trying to cajole Steve Ballmer back to the negotiating table; he’s trying to cover his rear and appease indignant shareholders. The only reason he’s so open about accepting a new bid from Microsoft, I think, is that he’s not expecting another one to come.
I wrote Friday about the daunting math that Microsoft suddenly faced if it didn’t significantly boost its stake in Yahoo. In short, though Yahoo insiders and generally supportive institutions control less than 40% of Yahoo’s outstanding shares, they easily control a majority of shares likely to be voted in a hostile proxy contest. Average Joes rarely vote in such fights, boosting the power of the pros. Why Microsoft’s bankers at Morgan Stanley didn’t figure this out sooner–or why CEO Steve Ballmer didn’t listen–is one of the intriguing tales that may yet be told. As of the opening bell Monday morning, however, the math changes immediately …
Yahoo CEO Jerry Yang will be slammed in the media over the next coming weeks. In my opinion, the criticism will be well founded. It is very tough to make an argument that Mr. Yang is acting in the best interest of his shareholders in rejecting Microsoft’s buyout offer. Personally, I can’t wait to see how long it takes the share price to reach $33. Good luck, Mr. Yang.
One more Microhoo observation before:
A) They announce the tech deal of the century.
B) They go to the mattresses.
C) They continue to screw around just to keep us sleep-deprived.
So let’s assume that Microsoft CEO Steve Ballmer wakes up tomorrow and Yahoo’s a done deal. First order of business is to find the right person for the job. But that’s where Ballmer’s going to have to summon the wisdom of Solomon.
Yahoo chief executive Jerry Yang has not resorted to boorish tactics like calling Steve Ballmer a sociopath or comparing him to Genghis Khan, but his determination to fight off an unsolicited merger with Microsoft at all costs is starting to recall Craig Conway’s ill-fated battle with his former boss at Oracle, Larry Ellison.
A common theme in the hallways and receptions of the Interactive Advertising Bureau’s annual conference in Phoenix, which ended Tuesday, was how little Jerry Yang did to make the case that Yahoo deserves to be independent. It wasn’t the sort of catty cynicism you so often hear, making fun of someone’s mediocre presentation. It was heartfelt disappointment.
One thing about Jerry Yang that I always have admired is that he cares. He cares about his employees. He cares about his products. He cares about his shareholders. Most of all he cares about building a world-class company that can be great at what it does.
If you look at Yahoo singularly, it is a great company. For he and David Filo to build a company with more than 6B in sales and more than 25B in market cap is an astounding feat. Unfortunately for Yahoo, it has had to weather both the Internet bubble bursting and the emergence of Google as a force in search and online advertising.
Jerry Yang must be starting to understand how Alfred Chuang of BEA Systems felt when Larry Ellison of Oracle came calling last year. Like Chuang, the Yahoo boss has just been landed with a takeover offer at such a big premium that he can’t possibly just ignore it. Also like Chuang, the options for other deals–or for staying independent–are shrinking fast. Here are the other partnerships or alliances that Yang could have grabbed at in the last year or so, and the chances that he can turn to them again now as he looks for an alternative to Microsoft …
Yahoo chief Jerry Yang summarized a plan to turn the straggling company around by becoming the start page for every Internet user across the globe. What Yang failed to provide, however, was a convincing solution to Yahoo’s existential crisis. The Hamlet of the Web won’t succeed by simply trying to become a start page. Yahoo is navigating the waters of the Internet advertising like a goldfish evading a shark, namely its archrival Google. Activist investors ought to take heed–Yahoo is ready for a shake-up.
When Marco Boerries and David Filo joined Jerry Yang on the stage of the Las Vegas Hilton Theater to show off new launches and upcoming concepts, the audience at their feet included most of Yahoo’s top management–among them Jeff Weiner, whom we last heard from here after he shook up the Yahoo Media Group. Weiner seemed a little taken aback by my comparison of Yang’s presentation with the one Terry Semel gave in 2006, particularly with how many elements of the strategy–for instance, Go, the three-screen approach to connecting–were still in place albeit evolving.
I hadn’t expected Terry Semel to step down on Monday. Less than a week before, after Yahoo’s annual meeting in Santa Clara, Calif., he approached me. He was quite affable, considering that we had had a pointed exchange during the earlier Q&A session and that I led a group of 100 shareholders owning 2 million [...]
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