Yahoo's fate riding on Yang's successor as CEO

Mon Nov 17, 2008 8:31 PM EST

technology, yahoo, change, ceo, yahoo-inc, jerry-yang, with-jerry-yang

Images

(showing 1 of 2 photos)

With Jerry Yang quitting as Yahoo Inc.'s chief executive, the Internet company's board will confront pivotal questions as it looks for a new leader.

Should Yahoo swallow its pride and try to strike a buyout deal with Microsoft Corp. at a price far below Microsoft's $47.5 billion offer from 6 1/2 months ago? Or should Yahoo still pursue a long-awaited turnaround that's becoming more difficult to achieve as the economy tanks?

If Yahoo plays it safe and hires someone from within or someone friendly with Microsoft, it could signal the board merely wants an interim captain who can steer the ship until Microsoft, or possibly another buyer, comes to the rescue.

But should Yahoo recruit a CEO with a prestigious resume or pluck an up-and-coming technology star, it will be seen as a sign that the company is digging in to remain independent for the long haul.

"It's time for Yahoo to decide if they are going to keep entertaining offers or really start to focus on a business strategy," said Mike Leo, a veteran online ad executive who now runs Operative Inc. "Yahoo still has some great assets. They have just been mismanaged."

Most analysts and investors have interpreted Yang's departure as precursor to Microsoft's acquisition of Yahoo in its entirety or at least its search engine, which ranks a distant second in usage behind Google Inc.'s.

Yahoo shares gained 92 cents, or more than 8 percent, to close Tuesday at $11.55. That's a fraction of the $33 per share that Microsoft offered in early May before Yang's request for more money prompted the Redmond, Wash.-based software maker to withdraw its bid.

The negotiating breakdown infuriated shareholders and their fury intensified as Yahoo's stock plunged to its lowest levels since early 2003.

Yang, Yahoo's co-founder, clung to the hope that he could still engineer a comeback, but his plans went awry yet again this month when Google backed out of a proposed ad partnership to avoid an antitrust battle with the federal government.

The loss of Google's help, which was supposed to boost Yahoo's sagging profits, evidently prompted Yang and Yahoo's board to conclude they needed to announce a change in command even before a successor had been found. Yang, 40, will remain CEO until his replacement is hired and then revert to his former advisory role of "Chief Yahoo."

Yahoo so far has given few clues on the leadership skills it's seeking, saying only that it wants a CEO "who can take the company to the next level." The company has hired Heidrick & Struggles, an headhunting firm, to recruit its next CEO.

Although Yahoo's profits and stock price have been crumbling for nearly three years, analysts say the company's huge audience of about 500 million Internet users and leadership positions in e-mail and news could still attract a big-name executive. "Yahoo can still be salvaged," said Forrester Research analyst David Card.

The names of possible successors include obvious ones like Yahoo's current president and Yang confidant, Susan Decker, as well as its former chief operating officer, Dan Rosensweig, who left last year after a management shake-up diminished his authority.

Other candidates offer more intrigue, like former eBay Inc. CEO Meg Whitman or media mogul Rupert Murdoch's top lieutenant at News Corp., Peter Chernin, who just so happens to be getting ready to negotiate another contract.

Whitman appears to be a long shot because she has indicated she's more interested in pursuing a political career than returning to the executive suite.

Jonathan Miller, the former CEO of AOL, has been mentioned as another possibility. But when he left AOL in 2006, his severance agreement included a noncompete clause that prevents him from working from rivals like Yahoo until March 2009. Time Warner Inc., AOL's corporate parent, enforced the provision to block Miller from joining Yahoo's board last summer.

Gartner Inc. analyst Allen Weiner believes Yahoo should recruit a turnaround specialist or a "young Turk" in the mold of Jason Kilar, who was lured from Amazon.com Inc. last year to run the online video site Hulu.com. If Yahoo takes that kind of a step, Weiner said the deep pools of talent at Silicon Valley neighbors Google and Apple Inc. might yield a savvy new leader.

Other names being bandied about include the former head of Microsoft's online operation, Kevin Johnson, who helped persuade the software maker to bid for Yahoo. Johnson left Microsoft during the summer to become CEO of computer gear maker Juniper Networks Inc., which is located a half-mile from Yahoo's headquarters in Sunnyvale, Calif.

Whoever Yahoo selects needs to have charisma and vision if the company is to have any hope of bouncing back, said Todd Dagres, founder of the venture capital firm Spark Capital. "Yahoo is like a wounded animal right now. They need an Obama-like leader," he said.

Microsoft might make a move on Yahoo before the board even has a chance to hire a new CEO, Jefferies & Co. analyst Youssef Squali suggests. He estimates Microsoft could buy Yahoo in its entirety for $20.50 to $22 per share or perhaps just snap up Yahoo's search operations for $8 per share.

Microsoft declined to comment Tuesday on its interest in Yahoo.

Yahoo's most outspoken director, Carl Icahn, has been lobbying for a search deal with Microsoft since he became one of the company's largest shareholders in May.

Icahn waged a campaign to fire Yang during the summer before reaching a truce that gave him and two allies seats on Yahoo's board. Those allies, former Viacom Inc. CEO Frank Biondi and former Nextel CEO John Chapple, also could vie for Yang's job.

Even if Icahn finally gets his wish, a Microsoft deal might not be enough to make him whole. He acquired his 5 percent stake in Yahoo for around $25 a share.

Sanford Bernstein & Co. analyst Jeffrey Lindsay doubts Microsoft will renew its pursuit of Yahoo until early next year. He reasons Microsoft has little to lose by waiting, since Yahoo's stock is unlikely to rise much higher, and the extra time will give the software maker more time to assess how its own efforts to improve its Internet operations are panning out.

Waiting also would help Microsoft get a better understanding of the antitrust hurdles a Yahoo bid might face under a new presidential administration.

7 Votes
Enjoy this article? Help vote it up the 'Vine.

Published to:

Michael Liedtke's Column, All of Newsvine
Groups: none
Regions: none

Public Discussion (10)

What's this?

Who's leading the conversation?

This visualization below allows you to see the impact that each user has on the current conversation. The top row contains the group of users who have had the most impact, the 2nd row the group of users who have had the 2nd most impact (et cetera). Users with similar impact are grouped together, and the average score of the group is shown to the left of the group. The author of the article is also shown on the left, in their corresponding group. Each user's score is based on the number of comments the user has made plus the number of votes their comments have received. The scores are calculated relative one another, so while their absolute value is not particularly important, their relative difference does indicate a larger difference in impact on the conversation.

4.4

{"commentId":4102726,"authorDomain":"jaybutler"}

Jay Butler

The shareholders should have ousted him right after he turned down Microsoft's offer.

{"commentId":4102726,"threadId":"421929","contentId":"2122351","authorDomain":"jaybutler"}

3 votes

#1 - Mon Nov 17, 2008 9:24 PM EST

{"commentId":4103044,"authorDomain":"checkerbattery"}

checkerbattery

yep, he's gonna regret that boneheaded decision for a long time.

{"commentId":4103044,"threadId":"421929","contentId":"2122351","authorDomain":"checkerbattery"}

#2 - Mon Nov 17, 2008 9:51 PM EST

{"commentId":4110462,"authorDomain":"jay-nj-pr"}

JoeBuck123

I agree. There is an old rule in the tech business. When the chief techie develops the products, make sure you move him aside and put a BUSINESS man/women at the helm to run the BUSINESS. What an idiot this guy is.

{"commentId":4110462,"threadId":"421929","contentId":"2122351","authorDomain":"jay-nj-pr"}

#2.1 - Tue Nov 18, 2008 12:18 PM EST

{"commentId":4106000,"authorDomain":"Sincere"}

BRIAN84

damn, I can understand he built it it is his baby and he wanted the best he could but sometimes there is just a borderline of greed, I am sure he has got mad $$$$$ he could have banked great sum selling to Microsoft, that would have easily comforted me in to find a new baby to create. Hahaha buy AOL it software now sucks

{"commentId":4106000,"threadId":"421929","contentId":"2122351","authorDomain":"Sincere"}

#3 - Tue Nov 18, 2008 6:57 AM EST

{"commentId":4106065,"authorDomain":"jaybutler"}

Jay Butler

I don't think that it was Yang's greed, but his pride. He insisted that Yahoo was worth more than anyone else did (including the stock market). He did not want to see his creation absorbed by Microsoft.

{"commentId":4106065,"threadId":"421929","contentId":"2122351","authorDomain":"jaybutler"}

1 vote

#3.1 - Tue Nov 18, 2008 7:09 AM EST

{"commentId":4116751,"authorDomain":"Sincere"}

BRIAN84

Yeah I agree the pride and true that about mircosoft I don't know if that would have been really a good company to go with they have enough problems getting things right as it is and are the up to the task to save yahoo?

{"commentId":4116751,"threadId":"421929","contentId":"2122351","authorDomain":"Sincere"}

#3.2 - Tue Nov 18, 2008 7:04 PM EST

{"commentId":4117003,"authorDomain":"jaybutler"}

Jay Butler

Who knows if Microsoft would have done anything with the company. Yang's obligation as head of a public company is to maximize shareholder value. Microsoft made an offer. Yang said thatthe company was worth more than that. Yet, he was unable to demonstrate to anyone why the company had more value. Then, the stock market slides and Yang's shareholders are left with a fraction of what Microsoft offered.

Microsoft would have likely broken off the pieces of Yahoo! that it did not need. What Yahoo! did have were a few very successful pieces like web mail, flickr, finance and to a lesser extent search. While Google trounced Yahoo in search, Yahoo still did better than MS has ever been able to do.

{"commentId":4117003,"threadId":"421929","contentId":"2122351","authorDomain":"jaybutler"}

1 vote

#3.3 - Tue Nov 18, 2008 7:27 PM EST

{"commentId":4106395,"authorDomain":"fah2305"}

fah2305

He has a great attachment to this company. He wants to make sure his company should go into a safe hand.

{"commentId":4106395,"threadId":"421929","contentId":"2122351","authorDomain":"fah2305"}

1 vote

#4 - Tue Nov 18, 2008 8:00 AM EST

{"commentId":4114508,"authorDomain":"jaybutler"}

Jay Butler

His stockholders have a greater attachment to the company that he does now. Once he brought the company public and made his money, the company was now out of his hands.

His obligation is to the shareholders and he failed them miserably.

{"commentId":4114508,"threadId":"421929","contentId":"2122351","authorDomain":"jaybutler"}

2 votes

#4.1 - Tue Nov 18, 2008 4:17 PM EST

{"commentId":4120732,"authorDomain":"ssosa34"}

Ebay Avenger

Look what I found on Sears!! They are involved in an Ebay-Backed Shill-
Bid Ring and Ebay utilizes the "Sears ID's" to "Pad Listings", which is stock-
manipulation!

Check out Ebay's shill-bid ID vickeyd102943
Member since: Oct-08-08 in United States

vickeyd102943 Feedback left for others:
9 Feedback left

    Feedback   Left for   Date / Time
my son loves this set! great price   Seller:
---> sears_liquidation_center (IL.) ( 66793 Feedback score ) Nov-18-08
12:08 -- (#270297441210) -- View Item <--- Item location: Ca, GA, or OH, U.S. LOL!

AAAA+   Seller:
---> sears_liquidation_center (IL.) ( 66793 Feedback score ) Nov-18-08
12:06 -- (#270297460259) -- View Item <--- Item location: Ca, GA, or OH, U.S. LOL!

i love this set great price   Seller:
---> sears_liquidation_center (IL.) ( 66793 Feedback score ) Nov-18-08 12:05 --
(#270296390096) -- View Item

AAAAAAAAAA+   Seller:
NOTE--> sears (IL.) ( 31949 Feedback score ) Nov-18-08 12:04 -- (#390005521295)
-- View Item <--- Item location: Ca, GA, or OH, U.S. LOL!

AAAAAAAAAAA+   Seller:
---> sears_liquidation_center (IL.) ( 66793 Feedback score ) Nov-18-08 12:03
-- (#270296318743) -- View Item

great price AAAAAAAAAAAAAAAA+   Seller:
---> sears_liquidation_center (IL.) ( 66793 Feedback score ) Nov-18-08 12:03
-- (#270296116264) -- View Item

great price   Seller:
two_day_parts (LA.) ( 7849 Feedback score ) Nov-18-08 12:02 -- (#250314490384)
-- View Item

good price would buy from seller again   Seller:
bumpercity0 (IL.) ( 428 Feedback score ) Nov-03-08 18:33 -- (#160290203814)
-- View Item

FLAG! ------> Negative feedback rating   the item is to old and cant be used
for HD tv. seller wont refund money!   Seller:
calowensgarage (MI.) ( 14 Feedback score ) Oct-31-08 05:48 -- (#260295512129)
-- View Item
______________________________

Feedback Profile
sears_liquidation_center ( 66794 Feedback score )
Positive Feedback (last 12 months): 98.5%
Member since: Jun-13-03 in IL., United States
All Feedback - 96,600 Feedback received
Feedback left for others - 98,409 Feedback left W/Feedback score merely 66794!
<--- Now I know there are those who say these two figures have no
correlation, but I believe greatly, that when these two figures differ
drastically, it indicates EBAY "LISTINGS PADDING", a manner of Stock
Manipulation in Inflating the Actual Number of Listings in an effort to
inflate Stock Value!

Feedback Profile
sears ( 31949 Feedback score )
Positive Feedback (last 12 months): 99.4%
Member since: Aug-05-01 in IL., United States
All Feedback - 48,806 Feedback received COMPARED TO
Feedback left for others - 72,584 Feedback left W/Feedback score merely,
jokingly 31949! <--- HUGE FLAG! As above, strongly indicates Ebay
"Listings Padding" = Stock Manipulation!

__________________________

Another Ebay Shill-Bid ID utilized on Sears Auctions is:

Feedback Profile
dluce6054jj ( 27 Feedback score )
Positive Feedback (last 12 months): 100%
Member since: Nov-12-07 in ME., United States

I won't list his Feedback here, but it is quite OBVIOUS he IS a Shill-Bid
ID for the "Sears ID's" too and ALSO for Ebay Seller ebestdeal4u!

Feedback Profile
ebestdeal4u ( 473541 Feedback score ) [Top 5,000 Reviewer]
Positive Feedback (last 12 months): 99.6%
Member since: Apr-09-01 in NY, United States BUT All Items say - Item
location: Manchester, U.K. <--- FLAG!
All Feedback - 507,276 Feedback received COMPARED TO
Feedback left for others - 466,454 Feedback left W/Feedback score ONLY
473541!

Feedback Profile
parrothead88 ( 123951 Feedback score ) Not a registered user
Positive Feedback (last 12 months): 0%
Member since: Jul-04-97 in FL., United States
All Feedback - 160,160 Feedback received
Feedback left for others - 171,070 Feedback left W/Feedback score merely,
jokingly 123951!

NOTE HOW EBAY HAS ERASED THE FIRST 8 PAGES OF parrothead88 "Feedback left
for others" TO COVER-UP FRAUD! Notice on page 8, the first entry is dated
Sep-23-05 and the last entry on the page is dated Feb-03-98! I BUSTED
parrothead88 in May '06... clear to see that Ebay has erased all
parrothead88 "Feedback left for others" from Sep-23-05 to May '06!

Ebay is SOOOO BUSTED FOR TRYING TO COVER-UP FRAUD! TICK-TOCK... TICK-TOCK!

{"commentId":4120732,"threadId":"421929","contentId":"2122351","authorDomain":"ssosa34"}

#5 - Wed Nov 19, 2008 6:23 AM EST

{"commentId":4120746,"authorDomain":"ssosa34"}

Ebay Avenger

{"commentId":4120746,"threadId":"421929","contentId":"2122351","authorDomain":"ssosa34"}

#6 - Wed Nov 19, 2008 6:28 AM EST

{"commentId":4120755,"authorDomain":"ssosa34"}

Ebay Avenger

{"commentId":4120755,"threadId":"421929","contentId":"2122351","authorDomain":"ssosa34"}

#7 - Wed Nov 19, 2008 6:31 AM EST

{"canLink":false,"threadId":"421929","isPrivate":false}

Jerry Yang to step down as Yahoo CEO	Business Week	Mon Nov 17	0
At a glance: Yahoo co-founder and CEO Jerry Yang	Associated Press	Mon Nov 17	0
Ballmer dismisses Yahoo buyout but open on search	Associated Press	Wed Nov 19	1
Yahoo Chief will become 'chief Yahoo'	The New York Times	Mon Nov 17	2
Jerry Yang to stepdown from Yahoo CEO	Wall Street Journal	Tue Nov 18	0

Backyard

Yahoo's fate riding on Yang's successor as CEO

Published to:

FUN STUFF:

COMPANY STUFF:

LEGAL STUFF: