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Yahoo CEO Jerry Yang To Step Down

kdawson posted more than 5 years ago | from the dude-where's-my-stock dept.

Yahoo! 199

JagsLive was one of several readers to point out Jerry Yang's departure as Yahoo CEO. He's not leaving the company; he will return to his former role as Chief Yahoo, whatever that entails. Yang has been under fire in recent months from investors for his handling of Microsoft's recent acquisition attempt."Yahoo, under fierce financial pressure, has begun a search to replace company co-founder Jerry Yang as chief executive, the company said Monday. 'Jerry and the board have had an ongoing dialogue about succession timing, and we all agree that now is the right time to make the transition to a new CEO who can take the company to the next level,' Chairman Roy Bostock said in a statement."

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Isn't it kind of sad (5, Insightful)

Armakuni (1091299) | more than 5 years ago | (#25798839)

when a company's main goal is to be acquired as soon as possible?

And here I thought (2, Insightful)

djupedal (584558) | more than 5 years ago | (#25798875)

...it was to avoid doing the deed w/MS at any cost.

Re:And here I thought (-1, Troll)

Anonymous Coward | more than 5 years ago | (#25801003)

I thought that Mister T ate my balls!

Re:Isn't it kind of sad (2, Funny)

Anonymous Coward | more than 5 years ago | (#25798945)

Exactly. This is capitalism at work. In Communist Canada, company sells you.

Re:Isn't it kind of sad (4, Insightful)

QuantumG (50515) | more than 5 years ago | (#25799063)

Well, in the case of Yahoo, sure, they've already gone public. But for startups? Getting acquired is the dream. You don't have to deal with those bastard accountants, and everyone gets a payout.

Re:Isn't it kind of sad (4, Insightful)

Antique Geekmeister (740220) | more than 5 years ago | (#25799729)

It's the dream for the investors. Employees who don't live near the new corporate offices, or who liked actually getting anything done, or the latest who weren't there long enough to have received options, often wind up really hurt by such corporate purchases.

Re:Isn't it kind of sad (1, Insightful)

QuantumG (50515) | more than 5 years ago | (#25799779)

Yes, it's a dream for the shareholders. Ya know, the people the company exists to serve?

Re:Isn't it kind of sad (3, Insightful)

Antique Geekmeister (740220) | more than 5 years ago | (#25800183)

Different shareholders have different dreams. And shareholders are hardly the only investors in a company: those who work there have legal rights as well, and may be served better by different corporate strategies. Being purchased by Microsoft, for example, has been the death knell of many companies with valuable products or even profitable businesses.

Re:Isn't it kind of sad (5, Insightful)

bberens (965711) | more than 5 years ago | (#25800509)

Seriously, the company you work for does not exist to enrich your life. It exists to enrich the life of the owner(s). You are paid a stipend to perform labor because the owner(s) believe that your work will further enrich them.

Re:Isn't it kind of sad (3, Insightful)

Martin Soto (21440) | more than 5 years ago | (#25800263)

Nope, companies are there for offering goods and services, which means, they should concentrate on serving their customers, not their shareholders. If capitalist principles hold at all, a company that serves its customers well should of course make money, which, in turn, should result in higher returns for the shareholders.

Saying that companies are there only to serve their shareholders, that is, only to make profits, is just a justification for all sorts of dirty business practices. If all you have to do is increasing profits, it is then perfectly OK to release dangerous products, abuse your employees as much as possible under applicable legislation (and then maybe a bit more), harm the environment with your production methods, or risk people's life savings in absurd investment schemas, among many other horrors of modern life.

Re:Isn't it kind of sad (2, Interesting)

timeOday (582209) | more than 5 years ago | (#25800891)

To me it is clear that a company does not exist for one single reason, since most can't exist without customers, employers, and investors; therefore the purposes of the company are to satisfy customers, pay employees, and enrich investors. Of those three, I'd say investors are the least necessary, since a company could grow (however slowly) without borrowing. Bartering certainly predates credit and supported economic development to a certain point.

Re:Isn't it kind of sad (2, Informative)

tftp (111690) | more than 5 years ago | (#25800909)

Saying that companies are there only to serve their shareholders, that is, only to make profits, is just a justification for all sorts of dirty business practices.

You may not like it, but that's how the world operates. People who invest their money (investors / shareholders) are the primary focus of the company. Customers really exist only to help the company to make money. Anything that is not illegal is allowed and is expected to be done if it furthers the goal of making more money. In fact, if the business managers do not do what is expected to make more money ("fiduciary duty [wikipedia.org] ") then they can be sued and/or replaced by investors.

Re:Isn't it kind of sad (3, Insightful)

Martin Soto (21440) | more than 5 years ago | (#25801519)

I'm glad to see you got my point completely. Indeed, it is exactly this state of affairs you describe so well that worries me so deeply.

Anything that is not illegal is allowed and is expected to be done if it furthers the goal of making more money.

If I'm reading well, what you're implying here is that all ethical and moral concerns you may have about a particular action should be ignored as long as this action increases profits. This is, once again, the logic behind such tragedies as Union Carbide's disaster in Bhopal, India. [wikipedia.org] I'm pretty sure Union Carbide's behavior was not illegal according to Indian law, but I'm also pretty sure many people inside the company knew what was going on, but didn't act on ethical grounds becase it was legal and would increase profits.

So, this way of thinking can kill people and ruin lifes. It is actually doing it as we speak. I thought capitalism was supposed to make us all prosperous and happy by making resources available where they are needed for wealth creation, and rewarding people according to the value of their contributions. I doesn't seem to me, however, that our current form of capitalism is doing any of these.

Re:Isn't it kind of sad (4, Interesting)

uberotto (714173) | more than 5 years ago | (#25800959)

You seem to be missing a fundamental shift that has occurred in the U.S. and around the world over the last 30 years. You are right, the customer is king and that any companies primary goal should be to serve their customers. And in the case of Yahoo, as well as most other large American corporations that's exactly what they are doing...

What you are missing is the shift that has occurred as to who exactly the customer is. Now days, for most large corporations the customer is the stock holder. We, the consumers are the product that is being sold. With Yahoo, Google, MSN etc. it's about how many eyeballs they have looking at their pages. For companies such as Ford, GM, Target, WalMart it's all about the size of their consumer base. That's why Ford and GM don't spend a lot of time building cars that tomorrows consumers might want. Their only focus is to build as many of whatever cars the consumer is buying today.

In this new world, as far as the corporations are concerned we're just a bunch of whores and their all fighting to see who is going to be our pimp.

Re:Isn't it kind of sad (1)

Cormacus (976625) | more than 5 years ago | (#25801451)

I have no mod points, but I want to say I agree with you 100% For anyone who disagrees, I suggest a thought experiment: How would life be different if the following companies focused on serving their customers and not their shareholders?
  1. Insurance Companies
  2. Banks
  3. Credit Card Companies

Re:Isn't it kind of sad (1)

roman_mir (125474) | more than 5 years ago | (#25801601)

Nope, companies are there for offering goods and services

- how is it, leaving in the dream world? Companies exist to make money for the investors. Everything else is secondary, it's just the means to the end goal - money.

Re:Isn't it kind of sad (0)

DustCollector (903185) | more than 5 years ago | (#25800869)

>>Yes, it's a dream for the shareholders. Ya know, the people the company exists to serve?

A more enlightened company exists to serve its *customers*. Customrs are best served by capable and satisfied employees. Shareholders would benefit as a side-effect.

Too often, "we do this for the sake of the shareholders" line is an excuse for doing something unsavory, immoral, or borderline illegal.

Re:Isn't it kind of sad (0, Troll)

keithjr (1091829) | more than 5 years ago | (#25801135)

This line of thinking needs to die in a fire. The company exists to serve the employees. As in, the people whose livelihoods depend on the company doing well. Sure, the shareholders have a stake, but they'll move on. Lose your employees, and your company is toast. Thinking that you serve some invisible group of people has caused plenty of CEOs to act against their companies' interests.

I'm becoming more and more convinced that going public, despite the giant bags of money it brings in, is never a good idea in the long run. It puts your company at the helm of know-nothings like Carl Icahn.

Re:Isn't it kind of sad (1)

RMH101 (636144) | more than 5 years ago | (#25801505)

No. A company is a legal entity to deliver profit to shareholders. A well-run company would hopefully do this whilst treating employees fairly, because doing so enriched the company long-term, e.g. lower churn, higher productivity. However, if there's a firesale on, this may not make commercial sense...

Re:Isn't it kind of sad (1)

keithjr (1091829) | more than 5 years ago | (#25801629)

Well, let's look at the example at hand, with Yahoo and Microsoft. What happens if the will of the shareholders ("Say yes! Get bought out!") goes directly against the best interests of the company in the long term ("Microsoft will ruin everything we hold dear and laugh")? The shareholders were begging for Yahoo to take an action that works great in the short term but destroys the future of the company.

No, I'm not being sarcastic, I'm actually curious. It looks like a case of madmen at the helm.

Re:Isn't it kind of sad (1)

cryfreedomlove (929828) | more than 5 years ago | (#25800991)

How are employees hurt by corporate purchases?

Re:Isn't it kind of sad (1, Troll)

TheRaven64 (641858) | more than 5 years ago | (#25800683)

But for startups? Getting acquired is the dream

I'd have thought that being sufficiently profitable to buy back all of the VC-owned shares and give a large regular dividend to the founders would be the dream, selling the company would be second-best.

Re:Isn't it kind of sad (2, Funny)

NoobixCube (1133473) | more than 5 years ago | (#25799313)

We can only hope Brainsuck Industries will synergize with them.

Re:Isn't it kind of sad (4, Insightful)

bakuun (976228) | more than 5 years ago | (#25799463)

A company's main goal, seen from the shareholders point of view (that ultimately of course control the company) is to make money.

Microsoft offered $33 per share - the yahoo share is now around $10.

If I was a shareholder I'd be pissed as well.

And the shares dropped that much anyway (2, Informative)

Anonymous Coward | more than 5 years ago | (#25799891)

So unless they cashed in (and why not cash in when Yahoo! shares were at their highest?) the result of the shares would have been nuked big time too.

PS IIRC, the $33 deal was shares rather than cash.

PPS is $10 a year for 10 years more or less than $33 one-off? Yang was looking for the 10-year payoff, not the August one.

Re:And the shares dropped that much anyway (2, Informative)

Attila Dimedici (1036002) | more than 5 years ago | (#25800687)

S

PPS is $10 a year for 10 years more or less than $33 one-off? Yang was looking for the 10-year payoff, not the August one.

Except that it isn't $10 a year for any length of time, the $10 share price is a once and done deal (once you sell your share for $10, you don't have it anymore). It was $33 one off when MS made their offer, and now it is $10 one off on the open market.

Re:Isn't it kind of sad (2, Insightful)

Paradise Pete (33184) | more than 5 years ago | (#25800515)

Microsoft offered $33 per share - the yahoo share is now around $10. If I was a shareholder I'd be pissed as well.

The open market price at that time was $30. Anybody who didn't take some off the table then gets no sympathy. If not they were taking a huge risk in order to squeeze out another $3. When the upside is effectively capped like that, then without specific knowledge is foolhardy to risk everything for that relatively small return.

Euphemism (2, Funny)

oldhack (1037484) | more than 5 years ago | (#25798869)

"...a new CEO who can take the company to the next level"

So they're not even trying...

Dividends? (4, Interesting)

copponex (13876) | more than 5 years ago | (#25798883)

I just looked at the YHOO numbers and noticed there is no dividend. Watching some prophetic videos of Peter Schiff [youtube.com] , he seems to be saying that every American stock is basically a speculative gamble, and that there is no place to invest in a company with a real balance sheet in the states.

Can anyone "in the business" comment on what he's saying? Is there a possibility of returning to the more formal method of investing as a stake/stockholder and receiving a share of real profits?

Re:Dividends? (5, Insightful)

AuMatar (183847) | more than 5 years ago | (#25798929)

No- because investors today think the stock price means everything. Played that way, the entire thing is a giant pyramid scheme waiting to collape... oh too late.

Re:Dividends? (5, Interesting)

nedlohs (1335013) | more than 5 years ago | (#25799187)

Can't watch video since I'm on a machine without flash (or sound for that matter), but it's Schiff.

So he'll be pointing out that the US economy is fake, that it's all borrow and consume, and the US dollar is set to drop by a huge amount. And hence you should invest all your money overseas, via his firm of course.

He's basically right in principal, though I think he underestimates just how badly the US bursting will hurt the rest of the world, and he doesn't seem to notice that the US housing bubble is a dwarf compared with the UK... On Asia he's probably right, for the end game anyway.

Owning "growth" stocks that pay no dividends is gambling pure and simple. See Enron for how easy it is to create phantom earnings - it's a little harder to do so when you have to pay that dividend out... But that isn't US specific.

I would expect Schiff to not have any huge problems with US miners (of all sorts), US agriculture, and US oil companies. He does have the reverse of the norm view that the US has more "government risk" than other countries.

As in the US is more likely to declare a "windfall profit tax" and steal your dividends when those companies do very well as the domestic economy collapses or to simply confiscate your gold, etc than say China is. The really sad thing is that he's probably right on that one...

Re:Dividends? (-1, Offtopic)

Corporate Troll (537873) | more than 5 years ago | (#25800781)

in principal

What does a head of an educational institution [wikipedia.org] to do with all this? (hint [wikipedia.org] ) I hate that spelling error.... (or collage/college, affect/effect, and many more)

Re:Dividends? (5, Informative)

Rufus211 (221883) | more than 5 years ago | (#25799227)

Only very few tech companies that are huge and have been around forever pay dividends. The only examples I can find in the tech sector that pay dividends are IBM, Intel, Sony and HP.

The entire point of a publicly traded company is to increase shareholder value. One easy way to do this is to simply give the share holders money in the form of dividends. The other choice is to invest back into the company. If the company is still growing then there's a good chance that investing $X million into R&D/employees/capitol improvements/whatever will result in the company improving it's market capitalization by more than $X mill. If that's the case, then that produces more value for the shareholder and is the proper choice.

Basically dividends, and stock buy-backs which are effectively the same thing, are an easy way out when a company has more money than it knows how to make useful investments with.

Re:Dividends? (1)

blind biker (1066130) | more than 5 years ago | (#25799585)

Nokia also pays dividends. I know as I was on the receiving end for a few years.

Re:Dividends? (5, Insightful)

Anonymous Coward | more than 5 years ago | (#25799653)

Basically dividends, and stock buy-backs which are effectively the same thing, are an easy way out when a company has more money than it knows how to make useful investments with.

Or basically dividends allow your investors the option to take part of your profits and either put them back into the stock or use them for income or other purposes.

One symptom the lack of dividends leads to is companies feeling compelled to branch out in order to make use of the money they have on hand; they usually aren't as good at their new tacked-on field, and the formerly well-focused company that the investors bought into no longer exists.

Re:Dividends? (0)

Anonymous Coward | more than 5 years ago | (#25799727)

Love em or Hate em, Microsoft also pays a healthy dividend and has done for a few years now.

Re:Dividends? (2, Interesting)

Paradise Pete (33184) | more than 5 years ago | (#25800739)

Love em or Hate em, Microsoft also pays a healthy dividend

Based on the current share price, the dividend is more than 2.5%, and the stock has has PEG of only 0.85.
Here's an interesting tidbit - MSFT's market cap is ~171B, which is *less* than what AAPL's was back in January.

Re:Dividends? (0)

Anonymous Coward | more than 5 years ago | (#25799785)

Re:Dividends? (5, Informative)

Stuntmonkey (557875) | more than 5 years ago | (#25799275)

I'm not sure what your question is really about. Certainly many companies -- and nearly all that have been around for any length of time -- are profitable. Yahoo is quite profitable, generating over $600M of profit last year. So in that sense I'm not sure what you mean by "speculative gamble". Yes the market moves quickly and companies' fortunes can rise and fall, but it's been that way since capitalism was invented.

With regard to dividend payouts. In a high-growth company, the investors often prefer the company to retain earnings to fund future growth opportunities. When there aren't enough high-value growth opportunities and the cash starts piling up, usually companies will then start paying dividends (Microsoft, for example).

Because of US tax law, it's actually better for most investors if the company uses extra cash to buy back its stock (thus reducing shares outstanding, and increasing the price of the shares that remain), rather than pay it out as a dividend. The former results in a capital gain, which presently in the US is taxed as low as 15%, while the latter counts as ordinary income. Many companies do stock repurchases, sometimes in addition to dividends: Intel and Microsoft for example. This is another perfectly legitimate way to give money back to the investors.

Re:Dividends? (4, Insightful)

marcosdumay (620877) | more than 5 years ago | (#25799669)

If the companies don't issue dividends, the only reason to buy its shares is to sell those later, at a profit. That is a Ponzy scheme, it works on times of inflation and that's all, without severe inflation, if fails. Now, when the companies issue dividends, they can be avaliated on a P/E basis, and bought because of those dividends. There is no need to resell the stocks in order to make profit. That is a stable market (that can become a ponzy sceme sometimes, but doesn't need to be one).

That the US government encorages the first, and not the latter, tells a lot.

Re:Dividends? (1)

jabithew (1340853) | more than 5 years ago | (#25799857)

That is a Ponzy scheme, it works on times of inflation and that's all, without severe inflation, if fails.

It doesn't work with inflation, people just think it's working.

Re:Dividends? (2, Insightful)

TheSunborn (68004) | more than 5 years ago | (#25799927)

But you are forgetting that they may not be paying dividends now, but they can always choose to do it later. And this choice is really made by the stockholders(Maybe indirectly by voting for the board).

If I own 10% of a company with 10 million in cash, then the value of my investment will be at least a million, even if the company is not currently paying any dividends.

So you may think of the value of a stock as the ability of the company to pay dividends. And if they choose not to do it now, it is in a way the same as you lending money to the company.

If the company is in a high growth marked, then investing all the money now might allow the company to pay much more dividends later, and thus be a good thing. The companies that pay dividends are normally companies that are in a stable marked where they don't need all invest all their profit.

Re:Dividends? (0, Troll)

Rogerborg (306625) | more than 5 years ago | (#25800199)

But you are forgetting that they may not be paying dividends now, but they can always choose to do it later

And I can call my bank and say "I'm not paying my mortgage now, but I may choose to do so later." I'm sure they'll understand.

If they're not paying, then they're not paying. And by the way: the value of your investment is what you trade it for at the exact point when you actually sell, not what it's ostensibly worth 5 minutes before that.

Re:Dividends? (0)

Anonymous Coward | more than 5 years ago | (#25800399)

If I own 10% of a company with 10 million in cash, then the value of my investment will be at least a million, even if the company is not currently paying any dividends.

Good point, but you should also note that most companies are heavily to very heavily leveraged.

Another thing to note is that corporations many times do something simply because other companies do it - e.g., when outsourcing became a trend, many businesses didn't even examine the issue before they started doing it, and then they had to undo it when it didn't work. The lack of dividends largely falls under this category, although some headway was made once the tax rates were reduced to capital gains.

Re:Dividends? (1)

marcosdumay (620877) | more than 5 years ago | (#25800927)

Yes, and you are right. If the stockholders bought their stock expecting the comanies to pay dividends at some time, you have a stable situation; risky, but viable and, in general stable. The company can change hands before it issue dividends, the only needed characteristic here is that the company is valuated by the amount if dividends it's expected to pay.

But if they bought it expecting to sell at a bigger price at future, and don't expect the company to issue dividends, you are again at a Ponzy scheme.

Re:Dividends? (1)

Antique Geekmeister (740220) | more than 5 years ago | (#25800333)

It's not the only reason. Recovering corporate control from other voting members, especially those who disagree with the board about policy, is sometimes a big reason to buy back stock.

Re:Dividends? (0)

Anonymous Coward | more than 5 years ago | (#25799715)

Dividends are taxed by the IRS as capital gains, so long as they're qualified - you've held it for "more than 60 days during the 121-day period" - which is not a high hurdle to meet. I've liked the times some of my stocks performed buybacks, and feel they're unfairly derided by many, but they are not equivalent to dividends, much less always preferable.

Re:Dividends? (1)

iammani (1392285) | more than 5 years ago | (#25799297)

He is taking about Investors (nowadays called long term investors). These people depend on how good the companies fundamentals are( its called Fundamental analysis as opposed to Technical analysis). They buy stock of companies that have a good P/E (price to earnings ratio) and have promising revenues and cash flow.

The main source of returns they expect is dividend (which depends on the earnings of the company and the free cash it is sitting on). They enjoy the dividends, hold on to the stock, till they believe the company is not going to grow further or they are negative about the outlook about the company or they have need to redeem their investment for investing in companies or papers that they believe offer better returns.

But nowadays companies do not bother about being investor-friendly and stick with their excess cash. AAPL (Apple) is one of those, they have huge huge cash reserves, but do not give dividends, neither announce buy-back of shares. I would rate them among the least investor friendly companies.

In case of YHOO, it is more cash starved and can actually use some from MSFT.

And for the ones who wonder how dividents/buy-backs etc would help the company, its sort of paying money to your investors, so that in case you need cash later, you can get it back from them. You buyback/give_dividents when you are cash rich, the stock value rises as a result, and then when you need cash you sell the share you brought or issue new share at the higher price. Sounds good doesnt it.

Speculation and Investment (1)

OakLEE (91103) | more than 5 years ago | (#25799495)

First off, I watched that video, and Peter Schiff's comments, while prescient, did not call "every American stock" a "speculative gamble." His comments mostly had to do with the unwinding of the credit and housing bubbles, and what little reference he did make to stocks were with respect to financial companies, and with respect to those, he was of course right.

Financial companies' balance sheets are notoriously tough to understand and far from transparent. Go look at a company AIG or Goldman Sachs's 10-Q, and then look at a company like Apple or Caterpillar's and you will see what I mean. In part it's due to the nature of the beast because financial companies often hold all sorts of securities, loans, derivatives, and other paper, and they simply cannot line item all of these in even a couple hundred pages. Additionally some of these assets do not have a liquid market to trade in (i.e., they rarely if ever change hands), and thus, their current value has be be calculated based on projections and models.

Now back to your question of a formal method for investing, there are plenty of books out there for that, and it would take more than one post to outline one. However, here are some simple guidelines for a conservative investor to follow:

1) Always invest in companies that pay dividends. There are plenty of companies out there that pay pretty sizable dividends if you look outside the tech sector. I could go on forever about this, but safe to say that dividends are not only an instant return on your investment, but also if they are reinvested they can act like compound interest. Also, make sure the company is earning enough to pay out its dividend.

2) Only invest in companies whose business you can understand. This is for piece of mind, and will allow you to better see how changes in the economic landscape will affect a given company whose stock you own.

3) Always diversify your investments. No one stock or business sector (e.g., tech, health care, oil, materials) can make up more than 20% of your portfolio. Look at the tech bubble in 2000 or the financial crisis this last year. If you were all in tech or financial (respectively) you were probably did really well during the boom but were wiped out by the bust. Diversification helps mitigate this risk. It'll keep you from maxing out your returns, but it'll also prevent you from catastrophic losses.

Fundamentally, any investment involves taking a risk. The greater the risk, the greater the reward. The key to investing is to understand the downside risk and the potential upside of your investment so that you can make an informed choice in your decision.

Yahoo is... (3, Insightful)

retech (1228598) | more than 5 years ago | (#25798887)

the next AOL.

Re:Yahoo is... (1)

apostrophesemicolon (816454) | more than 5 years ago | (#25799661)

Jerry Yang actually, according to this article [yahoo.com] , considered acquiring AOL.. But with declining stock prices, they are running out of steam to keep up with the dailies, let alone for acquisitions.

@ Yahoo and Sarah Palin (0)

Anonymous Coward | more than 5 years ago | (#25798901)

Would you just go away already??

Re:@ Yahoo and Sarah Palin (0)

Anonymous Coward | more than 5 years ago | (#25799051)

Yeah, competition sucks. It makes life far too difficult, especially the part about having to ignore the competitors I don't support. Why can't my choice be the only damn one in existence?

Something everyone always forgets, or just ignores (5, Interesting)

Anonymous Coward | more than 5 years ago | (#25798909)

Jerry Yang was never meant to be Yahoo's CEO.

He took ever when Terry Semel took a gigantic shit on the company. He failed to act on Yang's and Filo's suggestion that Yahoo acquire Google when that was still possible. This was when they were still using PageRank, prior to their major search engine acquisitions. I rememnber at the time that this was going on, I was constantly talking to Yahoo people about how much sense it made for them to do so. I also remember the looks on their faces when they all came back with "Semel's not going to do it." He also amassed a private fortune at the company's expense while letting Yahoo go down the drain.

They kicked him to the curb and fell back on Yang as interim CEO. He finally stuck to the position when it looked like that was all that would keep the shareholders happy. But it was simply never supposed to happen.

If I blame Yang for anything, it's for ever letting Semel head the company in the first place.

Cite, please (1)

Frankie70 (803801) | more than 5 years ago | (#25801185)

He failed to act on Yang's and Filo's suggestion that Yahoo acquire Google when that was still possible.

Cite, please.

Larry & Sergei refused to sell Google from what I remember.

bye bye (2, Insightful)

cuby (832037) | more than 5 years ago | (#25798983)

Refusing M$ proposition was probably one of the worst business decisions ever made, and can lead to the end of the company. The CEO is there to execute the shareholders interests... Unfortunatly this is not the case in a lot of places.

Re:bye bye (0)

Elektroschock (659467) | more than 5 years ago | (#25799211)

Well, but a Microsoft acquisition would make the company stop operations anyway.

Microsoft is desperate to spent its cash and fight google. Now all competitors know that Microsoft as a business is going to die. Because the main cash cows, Office and Windows are under fierce attack. No one depends on Windows anymore for accessing the cloud and Office will continue to be the cash cow unless competitors or the cloud will take over. For me OO.org is now on the same level. Just a matter of time for Microsoft to collapse. Meanwhile Microsoft burns cash and creates new enemies by dumping money into unprofitable markets, see e.g. the Xbox challenge, see their attempt to position Live search against google, Silverlight is nothing but a Flash me-too etc. etc. Microsoft is in urgent need to diversify its business while the growing alliance of competitors hunts after their cash cows.

Re:bye bye (3, Insightful)

prisoner-of-enigma (535770) | more than 5 years ago | (#25800357)

Now all competitors know that Microsoft as a business is going to die. Because the main cash cows, Office and Windows are under fierce attack.

Your statement is correct insofar as all things happen if given an infinite time span. Excluding an infinite time span, your statement is really, really reaching.

Office and Windows are huge cash cows for Microsoft. Office alone commands more than 90% of all office productivity software in the world. If you think that's going to be replaced en masse by OpenOffice or Google apps anytime soon, you're delusional in the extreme. It may work fine for you, but the vast majority of the business world does not agree with you. You can argue the merits of OO vs. Office all day long, but in the end it comes down to where businesses place their faith. Despite the huge price, despite the bugs, despite the bloat...they choose Office. They do it not only because it's the devil they know but because it's the devil everybody else uses as well. Businesses do not operate in a vacuum, and they must be able to reliably and accurately exchange documents and data with other businesses. With Office they are assured of this. With anything else it's a crapshoot unless you're dealing with only the most basic types of documents, spreadsheets, or presentations.

As for cloud computing, the idea will gain traction over time, but Microsoft isn't sitting idle. Do you think Microsoft isn't investing in cloud computing? They are, and quite a bit at that. If and when cloud computing becomes a panacea, Microsoft will control a healthy chunk of it. Maybe more, maybe less, but there is no doubt they'll be a sizable player.

It seems rather obvious that you're letting your anti-MS stance interfere with objectively judging the situation. Microsoft just finished hugely profitable -- in some cases, record profits -- for the last couple of quarters. The company has cash reserves eclipsing pretty much every competitor on the planet. You obviously want Microsoft to fail, but that does not mean they're anywhere near failing. Quite the contrary, actually. You need to stop letting your bile skew your judgement.

Re:bye bye (0)

Elektroschock (659467) | more than 5 years ago | (#25800491)

Microsoft never understood the internet. They failed with search and for the same reason will fail with the cloud. They are in desperate need to get new markets. It is true that the cash cows will continue to generate profits but what a company with large growth rates will have to sustain them or the stock market gets nervous.

OpenOffice is a low investment effort for its competitors and eats quite a chunk of their market, the more the market becomes competitive the more Microsoft has to lower its price offers. It is the only party you can expect to lose from these investments.

Netbooks now offer the opportunity to put Microsoft under pressure on the Desktop and offer cheaper deals. Hardware vendors play their games with Microsoft. Same is done by large scale customers which start their Linux pilot for procurement flexibility.

In many other markets the company actually buys market share at the expense of established competitors that fiercely fight back. Everything the do strenghtenes the alliance of competitors and there is simply no alliance partner except software sales and Symantec.

Re:bye bye (4, Funny)

Amamdouh (1130747) | more than 5 years ago | (#25799213)

Looked like his judgment was clouded by arrogance. He did not refuse to sell he just refused the price claiming it was too loo and claiming that Microsoft gravely overestimated Yahoo's problem hmmm... Guess what Yang, seems you were the one overestimating your value. John C Dvorak made an interesting argument about this deal "Yahoo! is not worth $44 billion. Period. You could buy General Motors lock, stock, and barrel for $14 billion, name all the cars "Google Sucks," and get more bang for the buck."

Re:bye bye (1)

iammani (1392285) | more than 5 years ago | (#25799331)

You could buy General Motors lock, stock, and barrel for $14 billion, name all the cars "Google Sucks," and get more bang for the buck."

wouldnt it be cheaper to have windows screensaver say "Google Sucks" instead?

Not quite bye-bye (1, Insightful)

Anonymous Coward | more than 5 years ago | (#25800003)

To blame mere arrogance is to simplify the situation to petty and infantile proportions.

Yang didn't want to sell out to Microsoft, effectively killing his baby. It's not arrogance that drives this reaction, it's concern motivated by fear. Anyone who's ever met the man will tell you this. I myself have been told this by Yahoo people that I trust. Shit, anyone who's ever cared about one's own creations will tell you this. You can't take any of his statements of undervaluement at more than face value. You certainly can't extrapolate arrogance from them. They were meant to assuage investors, rally the troops, and pacify the media circus. If he'd taken Ballmer's offer, he could have said whatever he wanted, since the investors would have already gotten what *they* wanted.

Jerry's strategy of sandbagging Ballmer preserved Yahoo at the shareholders' expense. He and his management team were NOT supposed to do that, and investors have a right to be angry. But damn it if I'm not grateful as a long-time daily Yahoo user and customer whose investments in the company are not in the form of stock.

In the end, do I think it was the right move? Well, like I said, I am not a shareholder, so yes, I do. I can play armchair pundit just as well as all the death-to-Yahoo commenters (who are likely either angry shareholders themselves or just idle bystanders), who are merely counting down the minutes to some spectacular corporate meltdown event that might provide some amusement and water-cooler talk for a few days. But to date, what has happened? Icahn has been checked. Ballmer's cooled off just long enough to pretend like he knows nothing about all that Vista Capable foolishness. Yang is resigning the post he was never supposed to hold or even wanted to hold, BUT is still retaining the spiritual leadership position within the company that he and Filo have always had as its co-founders. Zimbra, Flickr, Yahoo Search, Yahoo Mail, and Babelfish, not to mention a gigashit-ton of other projects and the FreeBSD and linux servers that they run on, etc. etc. etc. are not in Microsoft's hands, awaiting summary extinguishment. Google still has one more competitor pushing them forward. For that matter, so does Microsoft. On the downside, some good people have left the company and other good people have been left by the company. And an even greater number of shareholders are storming the gates with torches and pitchforks. Tough trade to make, but at least they're still standing.

I've been cheering his rejection of Microsoft... (4, Interesting)

jbm (17264) | more than 5 years ago | (#25799015)

...and I hope I'm not the only one. I actually use Yahoo Shopping on a regular basis, but if Yahoo were acquired by Microsoft I'd stop immediately, and find an alternate vendor-aggregator. Just a matter of principle (and maybe as much aesthetic as anything), but Microsoft just icks me out.

Kinda funny because it troubles me little to support an empire which would probably be just as evil if it had the same amount of power, Apple's. But Apple has an aesthetic sense, and has thus slipped perhaps-irrationally behind my defenses.

This whole Yahoo mess is also a fine example of the downside of going public -- you have amoral raiders screaming the battlecry "shareholder value" and using that to bludgeon anyone in a company who makes a principled decision which might not maximize stock prices in the short term.

(Mod me +2/-1 incoherent?)

Re:I've been cheering his rejection of Microsoft.. (2, Interesting)

FeepingCreature (1132265) | more than 5 years ago | (#25799043)

Yahoo! Mail user here. Same problem.

I really hope they make it.

Not me! (0)

Anonymous Coward | more than 5 years ago | (#25799205)

I just send all my email steganographically embedded in anonymous Slashdot comments!

Re:I've been cheering his rejection of Microsoft.. (2, Interesting)

apathy maybe (922212) | more than 5 years ago | (#25799125)

Yeah, I've got two Yahoo email accounts I've had since the Nineties (they said they were for life, I hope they meant my life, rather than their life...).

I like the Yahoo Mail interface, even more than the Gmail one in many respects. I've got a stack heaps of old emails (dating back 10 years almost).

But if Microsoft bought up Yahoo, I would be out as soon as I could.

Luckily I have access to POP for Yahoo, so I could just download all those emails that way (I should do that anyway...). (For those of you who have Yahoo email accounts, but don't have POP, I was going to tell you how to do it, but I can't get into my email account ... :(.)

Why don't I want Microsoft? Because I don't trust them. I don't trust Yahoo either, but inertia keeps me there...

Re:I've been cheering his rejection of Microsoft.. (4, Interesting)

shutdown -p now (807394) | more than 5 years ago | (#25799209)

... a company who makes a principled decision which might not maximize stock prices in the short term.

It's all well and good when there is any "long term" to think about... but in the case of Yahoo, there's simply none. So it was a bad decision no matter how you look at it.

Re:I've been cheering his rejection of Microsoft.. (3, Insightful)

blind biker (1066130) | more than 5 years ago | (#25800419)

I look at it from the point of view of a Yahoo user (of various services) and I feel it was a great decision. Yahoo isn't going anywhere - they are a PROFITABLE company, even if they don't rake in billions per quarter. a few hundred million bucks is nothing to sneeze at.

Re:I've been cheering his rejection of Microsoft.. (3, Insightful)

TheRaven64 (641858) | more than 5 years ago | (#25800759)

Companies continue to exist until they run out of money. Yahoo! made a $92m profit last quarter and they have assets worth over $11bn. They are growing, albeit slowly, so it will be a long time before they go away. They still have a recognisable brand and a lot of customers.

Re:I've been cheering his rejection of Microsoft.. (2, Insightful)

Znork (31774) | more than 5 years ago | (#25799395)

...and I hope I'm not the only one.

Considering the reaction of Microsoft stock during the acquisition period, you're joined by a lot of Microsoft shareholders.

I think trying to acquire Yahoo was more about Steve Ballmers ego needing some marketshare against Google, rather than any form of sane business for either company. I suspect Ballmer got told by the board to concentrate on core business instead of his ego, hence the abort of the takeover.

Apart from some speculators who've gotten what they deserve, it's hard to see why anyone would have any interest in the deal; like you say, yahoo would lose a lot of it's five customers, and Microsoft would get a company whose employees certainly wouldn't be thrilled to be working for them.

Re:I've been cheering his rejection of Microsoft.. (3, Interesting)

blind biker (1066130) | more than 5 years ago | (#25799613)

...and I hope I'm not the only one.

No, you're not. I like Yahoo the way it is now. Just as I liked Hotmail the way it was before Microsoft fucked it all up. Sadly, many current Hotmail users have no clue that there was a time when Hotmail was streamlined, efficient and uncluttered. It ran on FreeBSD. It just worked without sucking.

Microsoft added the suckage to Hotmail, I am sure they'd manage to do the same with Yahoo.

Re:I've been cheering his rejection of Microsoft.. (0)

Anonymous Coward | more than 5 years ago | (#25799789)

I hear ya. While I don't use Yahoo shopping, I do have a pro account on Flickr, for instance, and if M$ had bought Yahoo, I would've been in the rather uncomfortable position of having to decide whether to pay M$ money or move to Ipernity or so. I'm glad I don't have to do that now.

Re:I've been cheering his rejection of Microsoft.. (0, Offtopic)

mapkinase (958129) | more than 5 years ago | (#25799849)

I worked for 6 years in a company that just went public when I joined it. First they fired the worst, then modest performers and the final round (after I left) - the best.

Now they are selling legacy software.

Re:I've been cheering his rejection of Microsoft.. (1, Insightful)

Anonymous Coward | more than 5 years ago | (#25799979)

So I hate to be a wet blanket, but do you have any actual legitimate evidence that Apple would be as evil as Microsoft given the same position? Because while it's an awfully popular meme around here, I've yet to see a defense of it that doesn't boil down to a gut feeling.

Re:I've been cheering his rejection of Microsoft.. (0)

Anonymous Coward | more than 5 years ago | (#25800507)

I believe Kant called this a priori reasoning. We can't really get evidence in the empirical sense, but we can use logic and reason. Microsoft does what it needs to maintain it's monopoly. Any corporation with a monopoly would to what it needs to maintain it. Therefor Apple would as well. It's kinda weak but my point still stands.

Re:I've been cheering his rejection of Microsoft.. (1)

Paradise Pete (33184) | more than 5 years ago | (#25800577)

So I hate to be a wet blanket, but do you have any actual legitimate evidence that Apple would be as evil as Microsoft given the same position?

I've been using Macs since 1984, and expect to continue to do so, but if the way they are handling the iPhone app store is any indication, then yeah, I think under the right circumstances they might be Microsoft-esque in their evilness.

Re:I've been cheering his rejection of Microsoft.. (0)

Anonymous Coward | more than 5 years ago | (#25800735)

Same here. I use Google for most everything but I like Yahoo answers and Yahoo avatars. I'd hate to stop using them but I would if MS bought out the company.

Failzo=Rs (-1, Offtopic)

Anonymous Coward | more than 5 years ago | (#25799049)

frre-loving c7imate

He's so screwed! (4, Insightful)

Viree (214760) | more than 5 years ago | (#25799073)

Should have sold it back when M$ was offering $33 a share. It's kinda pathetic he had to beg M$ to buy now. I don't think he has done enough "plan B" for Yahoo as a company. It doesn't take a genius to predict that regulators in US won't be too happy with this kind of merger with Google.

0 result (4, Funny)

FornaxChemica (968594) | more than 5 years ago | (#25799141)

Yahoo, under fierce financial pressure, has begun a search to replace company co-founder Jerry Yang as chief executive

"Your search did not match any documents."

Re:0 result (1)

codeButcher (223668) | more than 5 years ago | (#25800311)

One has to wonder when Google will start to offer Search and Replace functionality...

;-)

Jerry Yang to be replaced? (0)

AndGodSed (968378) | more than 5 years ago | (#25799365)

Hmm... has someone Yangked his chain at last?

(Sorry, It's horrible I know, but I could not resist...)

Hope Yahoo survives (1)

iammani (1392285) | more than 5 years ago | (#25799401)

It would be bad if yahoo's market shares was gobbled by google. I hope yahoo survives atleast till there is a good enough competitor in the search engine market (of course other than google).

Why aren't shareholders suing? (4, Insightful)

Phurge (1112105) | more than 5 years ago | (#25799477)

I think the Yahoo/Microsoft saga is one of the most shocking displays of directors' self-interest vs their shareholders' interests. For the sole reason of maintaining independence, Yang and the rest of the Yahoo board instituted poison pill defences worth millions, attempted to a deal with a competitor which was good short term but very bad long term and held out for a price (in the absence of any other interest too) that was way above their previous closing price.

In hindsight shareholders have lost $20 billion. At the time of the offer the premium was around $10 billion. Astronomical numbers to waste just so a board of directors can maintain their personal wish to remain independent.

Its an indictment of the USA's corporate law that shareholders have not sued for breach of fiduciary duty. If they can, but haven't, well they deserve all they got.

Jerry Yang - good riddance. Just becasue you can create an online yellow pages in your garage, (and get very lucky), does not qualify you to run a billion dollar company.

Sue and expect Yang to pay the shareholders $20b? (1)

iammani (1392285) | more than 5 years ago | (#25799665)

I agree with the sue part, but what would be the compensation claimed by the shareholders and who should pay for it?

Should it from the pockets of Yang and the board of directors or should it be from the company's coffers (which coming to think of it, would inturn pull down the share value even further and spawning a new set of law suits)

Re:Sue and expect Yang to pay the shareholders $20 (1)

Phurge (1112105) | more than 5 years ago | (#25799939)

I'm not a lawyer but my understanding is that directors personally duties to the company's shareholders. So the shareholders should sue the directors. They're never going to get the $20bn back, but they should get some compensation (and send a message about how directors should behave)

Re:Why aren't shareholders suing? (1)

Znork (31774) | more than 5 years ago | (#25800149)

I think the Yahoo/Microsoft saga is one of the most shocking displays of directors' self-interest vs their shareholders' interests.

With that sentence I was unsure which directors and which shareholders you were referring to. If you recall, Microsoft lost more value than Yahoo gained on the bid.

In hindsight shareholders have lost $20 billion. At the time of the offer the premium was around $10 billion.

Half of which was in Microsoft stock. Which is also worth significantly less today.

The speculators could have sold at any time they wanted. Holding onto or speculating in stock in a bear market is actually not guaranteed to make a profit. If they have any complaints about that, they should apply to convert to a bank holding company and get bailout funds.

Re:Why aren't shareholders suing? (0)

Anonymous Coward | more than 5 years ago | (#25800417)

Mod parent up. The buyout offer was part stock, which is NOT fucking guaranteed to keep its value.

Also God forbid the controlling influences in a company look for something besides instant gratification.

What can be done? (1)

biscuitlover (1306893) | more than 5 years ago | (#25799515)

It's a tricky situation for Yahoo... the way I see it - and I'm aware this might be horribly oversimplified - they have two ways to turn things around.

1) Improve their market share in search - not easily done, considering Google's spending power and constant innovation in this area. Microsoft have been haemorrhaging money trying to compete here, and it doesn't seem to be getting them very far - look at the lukewarm reception [arstechnica.com] to their cashback scheme for evidence.

2) Start to better monetise their online tools and content (Pipes [yahoo.com] , Shopping [yahoo.com] , Answers [yahoo.com] etc.). If anything this is even trickier... even with pipes winning numerous plaudits in the industry and a huge user base on the likes of Answers, turning these into a major source of revenue is a tough problem.

I realise this is quite gloomy, which is a shame because I really want Yahoo to succeed, but let's be honest - it doesn't look too good at the moment does it?

Who would be a new CEO? (1, Funny)

Fri13 (963421) | more than 5 years ago | (#25799593)

I know next good CEO... how about Bill Gates... he is "retired" or get a Steve Ballmer there... Microsoft needs better CEO so he could be free. Even better, get a Steve Jobs and we could get yMail, yBrowser, ySearch etc. But because Yahoo! is a internet search (etc) company, without multimedia and computers, Steve would not leave Apple....

stupid netizens. (0)

Anonymous Coward | more than 5 years ago | (#25800091)

i dont know this guy. but i like yahoo. their
free online email doesn't suck like hotmail/live sucks.
i'm very sure that if M$ would have acquired Y!
all the online Y! email would start to suck instantly.

i really hope that Y! survives for a long time.
if stocks dive, it just means that nobody wants to
buy those stocks. it doesn't mean the company is bad.
especially if the company doesn't pay dividends. if a company doesn't buy dividends anybody buying into that stocks is not investing -BUT-
GAMBLING!!!

what Y! needs to do is lay-off people, refocus,
and let machines do machine work! i'm hard pressed to suggest to slash 50% of lazy desk toad
"employees" at Y!.

oh, and forget about the board of directors. they're not interested in growing the company,
deep down being super jealous about the success
of some snotty uni-kid that got rich with a good
idea, while the old-toads had to "work" to
become rich. they will do anything to make
the Y! ship sink, e.g. get bought by somebody
and then cashing in! a$$holes!
they still don't understand the internet. internet
companies are not like traditional companies,
and the success potential is still as possible
as it was in the hay days of the internet.
anyone saying that the internet is finish is an
idiot. the next killer-app might just be around
the corner and this is what the Y! ""bored" of
directors" doesn't understand. they are freaking
relics in a new economy. sheesh!

The next level (1)

ultranova (717540) | more than 5 years ago | (#25800225)

a new CEO who can take the company to the next level

But can they find the warp zone ?

Re:The next level (1)

OneSmartFellow (716217) | more than 5 years ago | (#25800475)

Damn, I was going to comment on that phrase too, but your snipe beats the hell out of what I was going to say.

Jerry is too nice to be CEO (5, Insightful)

pcause (209643) | more than 5 years ago | (#25800239)

I know Jerry and he is smart and insightful, but way too nice to be a CEO in an industry where he has to compete against SOBs like Ballmer and Schmidt. Jerry is polite and considerate. He is thoughtful and modest. The other guys are rude, arrogant, aggressive, nasty folk.

Jerry did a lot of useful changes, but what he didn't get that it is all about perception of being a leader and being on the path upward. A lot of the issue for the market is PR versus reality. And, let face it, search and search advertising are the things the market views as keys to future success and Yahoo has fallen further behind in this area. The decision to outsource search to Google by Yahoo may prove to be one of the top 5 greatest business mistakes of all time and Jerry has to share blame for that as well.

Jerry didn't move boldly enough, but his Board should have known that his base style wouldn't allow it. He should have reorg'ed immediately and publicly, giving folks ownership and accountability. You get the job but you get fired if you don't hit the goals. He let key services stagnate. Yahoo mail took too long to fix their UI to match Google and Yahoo still charges for POP access. Yahoo was the calendar leader, but Google launches a slightly better calendar and is viewed as the leader, even without a customer base. Yahoo Groups is a leader but is old and stale compared to something like Ning. There are lots of examples of how to upgrade their services out there for Yahoo and they seem to ignore them and let others steal mind share and leadership from them.

I fear that it is too late. Yahoo is the AOL of Web 2.0. It is only a matter of time.

Where do these people learn to speak like that ? (1)

OneSmartFellow (716217) | more than 5 years ago | (#25800595)

Chairman Roy Bostock - '... take it to the next level...'

Sounds like something one of the panel might say on "The X-Factor".

I want a Chairman of a Billion dollar corporation to say something a bit more concise, and profound.

Turn it up to 11, man !

"Chief Yahoo"? Isn't he the guy... (0, Offtopic)

joedoc (441972) | more than 5 years ago | (#25800867)

...who rides out to the middle of Doak Campbell Stadium in the spotted horse and throws the flaming spear into...

Oh, wait, sorry...that's Chief Osceola [wikipedia.org] .

Like anyone on this site would know anything about college football...

Not AGAIN (1)

ohtani (154270) | more than 5 years ago | (#25800935)

UGH! Am I the ONLY one on this planet that sees BEYOND the whole financial benefits of this! I don't care if Yahoo!'s current stocks were $1 and Microsoft was offering $100! If I was Jerry Yang I wouldn't bite on the offer either! The last thing I want to see is Microsoft acquire Yahoo! at all.

If you WANT to see Microsoft acquire them, all you're caring about is the money side of things. That's perhaps the worst reason to have this buyout go through. Jerry is trying to protect his company, damn it.

And I ask you all this: Since when is "offer" defined as "a requirement to oblige"?

Microsoft would have destroyed Yahoo (1, Insightful)

Anonymous Coward | more than 5 years ago | (#25801019)

Not selling Yahoo to Microsoft might have not been the best thing for shareholders, but it was the best thing for Yahoo. Microsoft would have destroyed Yahoo. They've had all these years to come up with a viable competitor to Yahoo and have nothing comparable. That's because Microsoft just doesn't 'get it'.

I originally got my Yahoo email account years ago when Microsoft destroyed Hotmail. Thats all Yahoo mail needs, passport sign in and downtime. Bleh.

Finally, my stocks have crashed recently too, albeit not Yahoo, shall I blame Jerry Yang as well?

Ya...what? (3, Interesting)

Anal Surprise (178723) | more than 5 years ago | (#25801371)

I'm a former "Yahoo", and I've got to say that I spent much of my time hoping someone would buy the company, if only to mindwipe the boneheaded middle and upper management.

They could've been the AOL in an AOL/Time Warner sandwich — that "gem" that someone else paid too much for.

Now? Forget it. I did.

Yahoo search surrendered the search biz when they agreed to send search marketing results through google. Even with the Department of Justice shooting that down, well, it's a hell of a statement when even your competitor chooses The Other Guy.

Another microsoft masterpiece (0)

unity100 (970058) | more than 5 years ago | (#25801471)

they have successfully destabilized and thrown another i.t./internet pioneer company into turmoil. merger talks, hostile acquisition, collaborating with DOJ to get their ad deal investigated (dont tell me they didnt) and etc and voila - another company providing service to people for decades going bust.

when i hear of the word 'microsoft' nowadays, i feel the urge to reach any thick stick nearby. or a baseball bat. or, a stone at least.
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