Move on the buyout position
A former PayPal president, Scott Thompson assumes Yahoo’s big
chair at an acutely dynamic and also slippery moment. Alibaba, China’s
giant web firm which is actually 40% Yahoo owned, is girding to make a
bid for Yahoo itself. It’s gone as far as hiring a Washington-based
lobbying firm, and this is being seen as an enormous sign that it has
designs on Yahoo. Alibaba’s Jack Ma scribbled the writing on the wall,
in no uncertain terms, back in September saying he would love to buy
Yahoo “if the opportunity presented itself,” and now he seems to have
pushed this by trying to arrange the situation.
Yahoo’s board is
said to be resistant to the idea, in the same way cofounder and then CEO
Jerry Yang (disastrously?) turned down a bid from Microsoft in 2008 for
$45 billion, with the firm now worth less than half of this, and has
been maneuvering to protect or dispose of assets that may be the most
attractive to Alibaba–such as Yahoo Japan.
Thompson needs to
solidify Yahoo’s position immediately. Either the firm needs to defend
against buyout situations like this or it needs to consider them
seriously. There’re a host of issues with the potential Alibaba buyout,
not the least being a Chinese ownership may upset U.S. regulators, but
to dismiss it outright may be foolish. And where Alibaba is interested
in treading, others may also be tempted.
Fix the board
Hiring a hot new CEO, one with demonstrable success in control of a different but massive Net firm, is potentially a good move. But Yahoo’s board is itself in trouble. Look at what’s really happened over the last year or so: Unsure of its direction, Yahoo’s board failed to oust unpopular CEO Carol Bartz last June and thus irritated many shareholders. Yahoo lost its position as the No. 1 ad seller to Facebook, Bartz failed to deliver on her promise to turn the juggernaut around, Yahoo’s profits slid continuously, and even when Yahoo won headlines read: “Is Yahoo’s $610 Million Anti-Spam Win Meaningless?”
