Twelve days back I came across a very unusual headline from All Things D that said “Yahoo for Sale”. At first I thought it was a joke but, as I got deeper into the article and researched it, it turned out to be not exactly as I thought. This subject kept revolving round my head that day & I decided to blog about it. “Twelve days”, what took me so long? Well, the fact that I’ve been busy for the past few days giving talks and couldn’t find time for this, but I did finish the write up (on paper) that very day, all that was supposed to be done was digitization.
No, Yahoo is not on sale.
Then what actually happened? A week before I read this ATD post, Yahoo’s board fired its CEO Carol Bartz. The obvious thought that ran into everyone’s mind was that yahoo is now ready to bring in hard and fresh meat, a new and Determined CEO, to strengthen its muscles. The aftermath you ask. Wall-street loved the decision. Yahoo’s stock prices soared.
Then what’s the reason for ATD to give such an awkward headline? The story follows.
Yahoo! Inc. was founded by Jerry Yang and David Filo in January 1994, since then the company grew rapidly throughout the 90s, made many high-profile acquisitions, survived the dot-com boom, and managed its way through the global economic downturn of 2008. Microsoft’s acquisition: - On February 1, 2008 Microsoft made an unsolicited takeover bid to buy Yahoo! for US$44.6 billion in cash and stock. Within a period of 10 days Yahoo! decided to reject Microsoft’s offer as “substantially undervaluing” Yahoo!’s brand, audience, investments, and growth prospects. Three years later, Yahoo! had a stock market capitalization of USD $22.24 billion, Miserable ain’t it? Who’s to blame? Enter Jerry Yang, Co-founder and then CEO of Yahoo! Inc. The guy has been dubbed one of the Worst managers of 2008. Humiliated Yang stepped down and Bartz was hired by the board in January 2009. But Yahoo never got traction. It’s still struggling, holding a present market capitalization of US$18.37B. Bartz never stood a chance of improving the state of the company. The board ousted Carol Bartz on September 6, 2011. CFO Tim Morse is named the Interim CEO of the company.
All this results in a broader set of major Silicon Valley players showing interest in acquiring all or a large piece of Yahoo and these guys are prepping possible bids and have been in touch with the Internet giant’s board. Yahoo’s board of directors are under constant pressure than ever before both from the outside as well as the inside. What happens next is something to wait for.