Concern #1-Leadership Black Hole for Yahoo!
Yes, its true Yahoo has bid goodbye to another CEO. Carol Bartz is the latest Yahoo CEO to receive the boot. Bartz came with praise from Silicon Valley for turning around the software maker Autodesk. However, her main focus with Yahoo was supposed to be internet marketing and advertising, a niche that she had no previous experience in.

Yahoo

Yahoo experienced no miracle turn-around under her leadership and went further into black hole that it’s been slipping into for several years. Bartz kept trying to fix existing problems and never was able to actually turn the company around. Her three major downfalls were:
  • Not taking accountability - blamingall Yahoo issues on previous CEO’s
  • Failing to hit price targets set by the board
  • Not increase internet advertising revenues for the company
Maybe Yahoo’s Board Needs Some Changes Too!
The interim CEO, named by Yahoo’s board is Tim Morse, the company’s CFO. Bartz brought Morse over from Altera Corp. in 2009 to help her with Yahoo’s cost cutting plans. It seems that Yahoo’s board is doing lots of maneuvering; but maybe they need some restructuring themselves. The board members hired Bartz in the first place; perhaps, they need some realigning to help get Yahoo’s top management out of the leadership black hole. They need to find someone who has internet marketing experience and can work together as a team instead of passing blame.

Concern #2-Can Yahoo Get Back on the Search Track Again?
Yahoo was king for a long time. In fact, in internet years, Yahoo is a great grand-daddy of internet companies, started over 17 years ago and continued to profit from there. They average of six billion dollars a year in annual revenues. The problem is that competition search engine sites, like Google and Bing, are gaining more viewers every day and Yahoo is standing still. Many analysts think the problems for Yahoo began when they tried to turn into a media mogul company and suggest Yahoo should turn their focus back to the world of mobile internet.

Concern #3-Get That Stock to Stay up

Yahoo’s stock increased by more than five percent when they announced Bartz’s departure and it continued to climb by almost seven percent a few days after. However, Google’s stocks increased by double digits over the same period of time. A Goldman Sachs investment group estimated that privately held Facebook is worth $50 billion in 2011 and that’s over three times as much as Yahoo is currently worth. Perhaps some new leadership will help to rally investors but many wonder if Yahoo is ripe for a sellout.

Concern #4-Should Yahoo Get Sold to the Highest Bidder While They Still Have Money in Their Piggy Bank?
Microsoft tried to purchase Yahoo in 2008 for $47.5 billion. The offer was scoffed at and now Yahoo isn’t worth anywhere near that amount. There are private equity groups and other possible bidders that might try to take over Yahoo because of its vulnerable state, but no one has made any major advances towards that yet. A report by the Wall Street Journal says that Yahoo is open to “selling itself to the right bidder,” but no word on who that might be. There is also the possibility of Yahoo investing in an internet “hot item,” like Hulu, to help strengthen the company.

Concern #5-Yahoo’s Next CEO
The thing that is keeping all of Yahoo’s juggling balls in the air is who the next CEO will be. Let’s take a peek at some of the top contestants:
  • Timothy Morse, current Yahoo interim CEO and CFO of Yahoo. He was the CFO for computer chip manufacturer, Altero Corp. and in the upper management of General Electric for 15 years. Morse has a lot of experience in Silicon Valley and finance and he’s already at Yahoo.
  • Ross Levinsohn, current Executive Vice President for the Americas Region at Yahoo. He has a lot of experience in acquiring other companies, but was not successful in all of his ventures.
  • Jonathan Miller, CEO at News Corp. He was CEO of AOL from 2002-2006, so he does have a lot of internet company experience.
  • David Kenny, former CEO at Publicis. He is an internet business veteran who graduated from Harvard Business School. He headed up a marketing and strategy team at General Motors as well before heading to Publicis.
One thing is for sure – the Yahoo rollercoaster is far from over.

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