Flailing Internet company Yahoo! seems to be going through a rough patch. After the exit of CEO Carol Bartz, a leaked memo from founder Jerry Yang to his employees sent the company and the market in a tizzy with rumors that there is a likelihood of sale. This was soon followed by a memo from interim CEO Tim Morse who seemed intent on nipping in the bud any negative feelings that the earlier memo might have generated in the employees, reported Reuters.
Yang’s email which was obtained by a Silicon Valley insider, starts with a lot of fluff but ends with an interesting paragraph:
Within a short time thereafter, acting CEO Tim Morse fired a memo, aiming to reassure employees that the company is not “in limbo”,but, perhaps creating more confusion.
“I’m sure by now you’ve all seen the note from Jerry, David, and Roy,” says the Morse e-mail, which was published by Kara Swisher at AllThingsD. “I want you to know that while the board works through all of our options, CEO, staff and I have been charged to move the company forward. That means we will not be sitting still over the next few months. We are actively making decisions and taking action.”
- Speed: Emphasize quick execution and decision-making
- Accountability: Do what you say you’re going to do–and take ownership for time to market, monetization, user engagement, quality, or whatever metric defines success for your team
- Purpose: Rally behind our mission and purpose: creating deeply personal digital experiences.
This could likely be the way in which the company is responding to the deluge of speculation that it is facing alleging that it cannot survive criticism from investors at all levels.
Amongst the various contenders for the beleaguered company, hedge-fund powerhouse Daniel Loeb is slated to be the most threatening. Loeb’s maneuvers were prefaced by Carol Bartz’s unceremonious ouster by the Yahoo board. Her longtime critic, Loeb, announced not long thereafter that he held a 5.15 percent stake in the company.
Daniel Loeb
Joshua Brown, VP, Fusion Analytics said, “Dan Loeb probably represents the most formidable challenge the company has faced yet. The company is fending off Loeb by opening its books to potential suitors; Yahoo is basically a web traffic play at this point with a competitive search business. But it is a wasting asset, gradually losing ground to Facebook / Google with every passing month, so the sooner they do something the better.”
Loeb is not one to mince words and at a Delivering Alpha Conference in New York, he told his audience, “no one wants to work with these clowns on the (yahoo) board.” He added that Yahoo has one of the most horrendous management teams he had seen in 16 years while being in the game.
Loeb founded his $8 billion Third Point fund in 1995 “with a focus on activist investing.” His New-york based firm has a venture capital arm in Silicon Valley.
Of course, Loeb is not the only Wall Street trader to pursue Yahoo, which is today valued at $ 19 billion. David Einhorn of Greenlight Capital, heckled Yahoo’s management as he witnessed a slide in prices of the shares he had bought in the company, in the second quarter of this year.
Many are of the opinion that Yang would have done well to sell off Yahoo to Microsoft when Steve Ballmer had evinced interest. But that is a thing of the past now and it remains to be whether Yahoo will continue to endure or whether it will buckle down and sell out?
You can read a full transcript of the Yang email at http://blogs.wsj.com/deals/2011/09/23/read-the-yahoo-memo-strategic-review-to-take-months/