A VC - Latest Comments in My Thinking on YHOO

Re: My Thinking on YHOO

TedMurphy — Tue, 17 Jun 2008 11:06:24 -0000

They should certainly sell or spin off the Asian properties. That's $7.24 per Yahoo! share just in the publicly valued Alibaba.com and Yahoo Japan. Their position in Alibaba Group could be worth another $2.53 (my guess).

Re: My Thinking on YHOO

edythe — Mon, 16 Jun 2008 18:20:32 -0000

arrington is wrong about employee morale. i work at Y!SM and morale is not low.

Re: My Thinking on YHOO

Bob Warfield — Sun, 15 Jun 2008 20:59:04 -0000

I agree on the new CEO. What you're describing as that CEO's course of action is exactly on target. What Yahoo needs is another Mark Hurd.

See my blog for more:

http://smoothspan.wordpress...

Cheers,

Re: My Thinking on YHOO

Varun Dube — Sun, 15 Jun 2008 11:34:26 -0000

Fred, I agree with your post to some extent. I see this more like a begining of a street fight which is out there in Open. In my blogpost I have talked more about this ...
See if you get a chance.

Re: My Thinking on YHOO

fredwilson — Sun, 15 Jun 2008 06:43:03 -0000

I like whichcraft and shake shack for lunch. Not sure where tim eats lunch.

I think we just see the world differently than you and Mike do.

The great thing is we will know in a couple years who was right

fred

Re: My Thinking on YHOO

fredwilson — Sun, 15 Jun 2008 06:34:03 -0000

It's sad actually

Re: My Thinking on YHOO

tweetip — Sun, 15 Jun 2008 03:04:52 -0000

"My blog is fubarred"

fred - that's too funny :))) lol

Re: My Thinking on YHOO

joe hunkins — Sat, 14 Jun 2008 20:45:09 -0000

What did you and Tim O have for lunch, hallucinogens? You correctly note Yahoo's leadership challenges but like the one option here that keeps the board intact and on track for more of the same company crushing behavior. Clean house? Not going to happen *now*.

It seems to me there are two issues and you guys are wrong on both counts where Arrington's got it right.

First, Yahoo's Google move proved that in terms of shareholder obligations it should have sold to MS. Yahoo cannot reasonably make a case that they will come out of the monetization hole using core values and then outsource your most lucrative biz to Google. Are you saying there is a Googley path back to $34+ per share? Nonsense.

Second, this just gives Google even more of a near monopoly on monetization. As Mike suggests competiton is lacking and needed in the search space. This is a big step in the wrong direction.

But maybe I'm just a bitter shareholder.....maybe just give me some of what you and Tim are having for lunch?

Re: My Thinking on YHOO

stone — Sat, 14 Jun 2008 19:51:39 -0000

Steve, you hit the nail on the head my friend. People seem to miss the point here. This isn't some ancillary business that they decided to exit, it has been their core mission (panama) for the last few years so says Sue Decker and Jerry Yang. I don't care that it's only certain search queries. That also misses the point in my mind. How does Yahoo credibly talk to publishers about monetizing their inventory going forward? If they come to me I'm going to ask why they failed in search and why I should believe they are much better with content pages than search. What is the answer going to be? I'd like someone to attempt that answer. It puts their entire display/exchange business in jeopardy, especially when Google and DoubleClick walk into publishers with bundled solutions and clever ways to leverage their expertise in search to monetize display inventory. Yahoo loses that sale 80% of the time, mark my words.

Re: My Thinking on YHOO

Steve — Sat, 14 Jun 2008 18:15:59 -0000

All well and good...but with Yahoo ceding control of their main product (ad revenue on search and its content aggregation), what exactly is the business that they are left with? To me, it is as if Target decides to outsource its retail operation to Walmart and industry pundits saying "...clean house, get lean, get out of businesses it shouldn’t be in. Focus on what it’s good at. And start making money and growing again..." Not to be disrespectful, where should they go from here?

Re: My Thinking on YHOO

stone — Sat, 14 Jun 2008 16:54:23 -0000

Michael Arrington will do whatever it takes to drive page views. I find most of his rants to be off the mark. His eye for a good start-up has always been suspect. His investments all seem to have failed. He has no rules --- anyone that watches him knows this. He even admits to looking at commentors IP addresses to discern who they are or where they are from. This all leads to me not thinking he has much credibility so I discount everything he says as if it all came from ValleyWag.

Re: My Thinking on YHOO

Se7en — Sat, 14 Jun 2008 16:13:05 -0000

Great perspective on the issue, thanks for the article.

I'm a bit puzzled by Techcrunch's escalating rhetoric and mounting hysteria about this issue. Its a big deal, but they are blowing it way out of proportion with their warnings of impending doom for the Net. I notice today they have continued the rant with more new articles about it.

One has to wonder why Techcrunch is so emotionally involved in this deal-unless of course they have a lot of stock riding on it :p

Re: My Thinking on YHOO

fredwilson — Sat, 14 Jun 2008 15:59:05 -0000

My blog is fubarred

Re: My Thinking on YHOO

fredwilson — Sat, 14 Jun 2008 15:59:04 -0000

Agreed. That's what I've been saying. Break up the company. Don't sell it

Re: My Thinking on YHOO

Greg Solovyev — Sat, 14 Jun 2008 15:18:16 -0000

Exactly, given that Icahn's only strategy is to sell to Microsoft, I find it hard to believe that Icahn would spend so much to get control of Yahoo without making sure that Microsoft actually wants to buy it. Especially after they started unrolling alternative strategies for gaining search traffic. Getting back to your analogy - who is Icahn going to bill the attorney fees to? I don't think it is over. I think Icahn is making a checkmate in three moves:
1 - buy more YHOO when it sinks to the bottom
2 - win the board
3 - sell to MSFT for less than $30/share
In order to execute this plan, both Balmer and Icahn need to make sure that everyone else thinks that Microsoft really-really does not want to buy Yahoo. Here's how they are doing it: Icahn is trying to look nervous, to make other investors nervous and make them dump YHOO. Microsoft offered the search deal with Yahoo just to make sure they can say "we do not want to buy the whole company" one more time.

Re: My Thinking on YHOO

gregorylent — Sat, 14 Jun 2008 14:52:26 -0000

i think they are in maintenance mode ... got 500 million on board, lot of parts are leaking, and plugging em up is taking most of the work week ... three separate smaller companies would be much better

Re: My Thinking on YHOO

gregory — Sat, 14 Jun 2008 14:48:54 -0000

i am reading with a very fast connection ... skim halfway down the page ...

and the right hand column finally loads, and jumps me up to the top again

wonder why

Re: My Thinking on YHOO

stone — Sat, 14 Jun 2008 13:45:04 -0000

Yahoo has had several different strategies even since Jerry took over as CEO. Go read the conference call transacripts and public emails sent by Jerry since he took the CEO role. You will see that they change their tune every 3-4 months. The first conference call after Terry left was all about their re-dedication to Search. The next one was about their advertising assets and their foray into display. The third conference call is where they hit us with their desire to be the "start page" for the web. Now they are saying they are focused on Search, Mobile, Community and "take your pick".

Can anyone articulate Yahoo's strategy? Not what you think it should be but what it actually is? Can anyone tell me what Sue Decker's vision for the company is? Can anyone tell me what she's good at? Does she have great product vision?

I agree that the MSN/YHOO deal was a disasterous idea but I also think that Yahoo's current management team --- the folks that brought us Panama --- need to leave the company in order for Yahoo to be fixed. What has Sue and Jerry done since the Peanut Butter Manifesto? Answer: not enough.

Re: My Thinking on YHOO

glemak — Sat, 14 Jun 2008 12:59:56 -0000

looking at mr. icahn's background though he has shown himself to not be altruistic but rather opportunistic, yes he believes he can take advantage of troubled companies/boards but always for his own personal gain (either financial or egotistical) if his actions also happen to help other shareholders that's just collateral damage (in a positive way for those shareholders of course) - he is not an expert media industry operator though even though he's bullied himself into numerous media related companies before, his expertise is in being a corporate raider, carpetbagger & sleazeball based on his actions and associations throughout his life :)

Re: My Thinking on YHOO

fredwilson — Sat, 14 Jun 2008 12:59:05 -0000

That's one of many good ideas I have heard in recent weeks

There is no reason for yahoo to throw in the towel

They just need to put a strategy in place that plays to their strengths and
go execute it

fred

Re: My Thinking on YHOO

charlie crystle — Sat, 14 Jun 2008 12:06:02 -0000

Yahoo should continue to build out its web services and APIs. But I can see it getting into mass market software successfully. It has the web services platform, has a desktop platform, and can connect the two for deeper value add and better performance than any browser app.

They don't just eyeballs, they have thousands of niche market segments organized nicely into groups, and could easily build software that helps each of those niches and market to them, and literally out-niche Microsoft, Google, etc. Semel was terrible--looked at Yahoo as an entertainment platform. But it has the best local search of the giants, best segmentation through groups, and quite a robust set of APIs and web services. With Yahoo, I'd own the small business space/SOHO market.

Re: My Thinking on YHOO

fredwilson — Sat, 14 Jun 2008 11:46:04 -0000

Icahn got in this because he sees a company that is not doing what its shareholders want. He's not that different than a lawyer who files a class action suit

He may be right, and he may bring needed change, but I am pretty sure he doesn't have a plan for yahoo long term

Re: My Thinking on YHOO

Sam — Sat, 14 Jun 2008 11:41:06 -0000

Good comment. One wonders sometimes if he means any of these ridiculous things he says, or if he's simply trying to promote his own empty brand with a bit of easy controversy.

Re: My Thinking on YHOO

fredwilson — Sat, 14 Jun 2008 11:36:03 -0000

They didn't outsource search to google. They just gave google certain keywords that they monetize way better than yahoo does

Fred

Re: My Thinking on YHOO

fredwilson — Sat, 14 Jun 2008 11:28:04 -0000

Good question jeremiah

I'd rather have my money in startups, google, amazon, and apple

Fred