Marissa Mayer is a terrible CEO. Unbelievable the amount of money she has been paid to flush the remainder of Yahoo down the drain with no strategy while employees suffer. Yahoo (net of BABA) is less than worthless.
No one, no one could have saved it and made it relevant. I think she did a pretty commendable job trying.
Agreed. I simply can't understand why we keep flogging this dead horse, Mayer or Verizon, none of it makes any sense. Am I missing something regarding the true value of Yahoo!?
Yahoo never had a chance.
As a stand alone entity, Yahoo simply had no real chance. Their only path to relevance was a complete remodel of their priorities ~10 years ago.
Verizon, honestly, doesn't make alot of sense but my guess is they think they can integrate it into their operations to make money. Idk how they would.
A 10-year old who knows how to play Monopoly could come up with it.
For much less money.
If you sell yourself as a savior at > $50M/year compensation, it is not unreasonable to demand close-to-miraculous results, not "trying".
Yahoo is apparently still worth ~$4 billion. For quite a while there, its nominal stock value was negative after dispatching Ali Baba, despite cash-on-hand in excess of zero.
I'm not a fan of Meyer's, but she managed to keep the beast alive, where her predecessors were killing it swiftly.
One of the previous CEOs was the founder Jerry Yang. He made one of the most epic corporate investments when he fought for Yahoo to invest in Alibaba.
No one, no one could have saved it and made it relevant.
If we are going to set the bar so low, I can think of a lot of qualified people in the Valley that could have done as good or better job than Marissa. She made a whole bunch of bets and basically none of them panned out. Her top skillset was supposed to be Product Management and the best that has yielded are one-time decent Yahoo products becoming shittier.
Whatever she did failed to turn the company around but that alone doesn't make her a terrible CEO.
This fallacy needs to die. You cannot just subtract the value of Alibaba and declare the company "less than worthless". Company valuations don't work that way
Yahoo has significant debt. If Yahoo were willing and able to liquidate Alibaba or Yahoo Japan the proceeds would be used, at least partially, to pay off that debt. You cannot stick all of the company's debt on a select portion of the business and declare it worthless based on that.
I can and do.
> Company valuations don't work that way
I disagree, except if you care to shell out <10 million and say "see it's worth something!" which is disingenuous. The amount to maintain the remnants will dwarf the cost of acquisition, making it a net loss.
Then you're wrong. That isn't how company book value works. A company's book value is the total of its assets minus the total of its liabilities. Removing an asset from the calculation without adjusting the liabilities is just wrong. It isn't proper accounting.
> I disagree, except if you care to shell out <10 million and say "see it's worth something!" which is disingenuous. The amount to maintain the remnants will dwarf the cost of acquisition, making it a net loss.
What numbers do you have to support this? What portion of Yahoo's liabilities are coming along with the assets Verizon wants to buy?
> Yahoo’s total market cap is less than the $40.5 billion, and after accounting for the cash on the company’s balance sheet, this means Yahoo’s core business is valued at less than $0. Now, this isn’t a new development that will disappear with some quick arbitrage. In fact, the value of Yahoo’s core business has been negatively valued for more than a year, so investors are seeing the value discrepancy measured by traditional means but just don’t believe in the company’s trajectory.
Edit (the numbers):
Long-term investments: 31DEC13: $5B -> 31DEC14: $44.6B
Deferred Long Term Liability Charges: 31DEC13: $1.1B -> 31DEC14: $17.1B
1. Reduce flex time or work from home: The logic on doing this was questioned at the time, but working with your colleagues in a confined space has proven to be beneficial (Pixar, Yahoo, almost any start up)
2. Developing child care policies that included having the kid be close to her (or this could be Marissa Mayer).
However, she allowed herself to become a larger than Yahoo personality. How many articles were about her describing her life, things she did, she was promoting her brand, not that of Yahoo. She then fell into the acquisition trap of getting Tumblr.
Pixar and startups work well not because they are in a confined space but because they have a good company culture that allows people to do their job. Things like reducing flex time and remote are just surface changes that avoid addressing the deeper issues. My company does the same: At every step people are discouraged from making changes. Management complains about lack of innovation so they do "innovation days" and put up innovation posters. But they still squash any good ideas people have because the next deadline is always two weeks away so there never is time to think about things.
But then I think any strategy that started with "This is how we're going to save Yahoo" was doomed to fail. The brand is synonymous with Web 1.0 and was tarnishing their acquisitions.
A strategy of "This is how we're going to leverage Yahoo's assets" would have been a better starting point. Yahoo should have become a parent company, like Alphabet, that stays silent and out of the way. Then run down the Yahoo brand while building the acquired brands and re-branding the successful parts of Yahoo as something else.
The stock market mis-prices things all of the time.