6 ms·

Sometimes, well it actually happens quite often, a company just runs its course and is better off just winding things up and closing shop. IMHO it looks like

Sometimes, well it actually happens quite often, a company just runs its course and is better off just winding things up and closing shop. IMHO it looks like the likely end game for Yahoo is: - taken private by a Private Equity firm - divest Yahoo Japan and Alibaba - any divisions that aren't making an actual profit, (tumblr, flickr, fantasy sports, etc, will be shopped around and sold if possible, or shuttered if not possible. - search, email and the yahoo front page will be sold to Microsoft Yahoo has done everything by the MBA book to turn around the company, they are at the step of brining in Mckinsley consultants, never a terribly good sign. Sometimes, time just passes a company by and you can't do much to turn it around, its not the leadership's fault or the engineers fault. The market just says the company is no longer needed. This doesn't mean the company is un profitable. Corel was a company in the early 2000's that went this route. A company can circle the drain, making slightly less and less profit each year, slowly laying off people which causes them to miss their next quarter, which necessitates more layoffs and the circle continues until someone buys them out. I think this is the likely fate of Yahoo. The next step is to engage an investment bank to find them a takeover partner if Silver Lake doesn't want to be the one to take them private. What other possible route is there? They've brought in 4-5 CEO's each with their own vision of what yahoo should be and all of them has failed to turn the company around. What is Yahoo's area of expertise that they make money at and can do better that Google, Microsoft, Facebook or Amazon?

akg_67 11y ago
Yahoo is textbook example of failure of online "advertising revenue" only company. Most such companies failed in last dot bomb. Only Yahoo survived because it was the largest with decent cash reserves. I am sure another dot bomb like event will take out today's darlings too.
shostack 11y ago
Having watched way too much "House of Lies" where consultants often seem to be brought in to back-up the viewpoint of a given executive and make the case for whatever that person's agenda is...what would such consultants likely be doing in this case in "the real world?" I admittedly haven't had the experience of working with any consultants, so I'm curious for opinions from those who have what happens when they come in during a "typical" engagement of this nature.
- anon8418 11y ago
  I spent a few years as a management consultant. Consultants are almost never hired to provide truly objective analysis. In most cases, they're hired to "back-up the viewpoint of a given executive". This is done by the executive to hedge the political risk required to go through with their action. They can point to McK when they defend their strategy to the board and then throw them under the bus if things don't pan out. The rewards for the consultant are high fees and living a luxe lifestyle of staying at high end hotels, traveling first class, and dining at michelin starred restaurants (all of course on the client's dime). Plus of course guaranteed future work. Even if the project tanks and the executive is fired, they'll be sure to hire McK again at their next gig. What most people don't realize is that consulting engagements are a careful collaboration between consultant and client. The findings are almost always driven by an iterative process where you go through review cycles with the buyer until you reach your "objective" conclusions, which by the very nature of how the work is performed, is totally subjective and biased. Doubly so for turnaround projects like this one. (not to mention that consultants are constantly trying to recycle previously performed analysis, regardless if it at all fits or applies in the target project). Management consultant is the biggest circlejerk profession. Even moreso IMO than ibanking. Classic self-serving MBA type job. Management consultants are to entrepreneurs what food critics are to chefs.
  - rdtsc 11y ago
    Yap pretty much. Remember reading an expose with some examples of how consulting firms would hire fresh grads from Ivy Leagues, and then send them to big companies, for top dollar, (or to other countries like Saudi Arabia) to basically do what you describe -- support the viewpoint of the executive who hired them. Of course all done officially with power point slides, excel spreadsheets and pie charts.
    - anon8418 11y ago
      At the top tier firms, the creation of slides, charts, etc is usually outsourced to a back office dedicated to the job. I'm not sure if this is still the case at McK, but this office used to be stationed in the developing world... Consultants would draw and describe what they wanted, goto bed, and awake to slides, charts in their inbox. Same thing with models. Most firms have "rockstar excel jockeys" (usually analysts/associates/etc.) that are pimped out to project teams to serve this singular role (making models, building business cases, etc.). Management consulting, such a surreal profession...
irishcoffee 11y ago
> What is Yahoo's area of expertise that they make money at and can do better that Google, Microsoft, Facebook or Amazon? Fantasy sports. In much the same way Sega pivoted, Yahoo could.
- remarkEon 11y ago
  Sega? Edit: is there a story I don't know about? I know a reasonable amount about gaming but I guess I'm drawing a blank on a successful Sega pivot. I remember some cool ads when I was a kid, I suppose.
  - Captain_Usher 11y ago
    Sega once participated in the video game industry roughly how Nintendo does today, by producing a home console and making first-party titles for it with their established properties like Sonic the Hedgehog. Sega's consoles definitely have fans, but the company was losing money and Sega did not produce another console after the Dreamcast. Today, they do perfectly fine for themselves by making games as a third-party developer and operating other assorted media ventures like merchandising for anime. They're also a major producer of arcade games.
  - pbroderi 11y ago
    Sega has been around quite a while but probably referring to when it discontinued console development and shifted gears to creating games for third-party platforms.
  - umanwizard 11y ago
    Sega used to make consoles; now they exclusively make games.
  - Abraln 11y ago
    Not the person you are replying to, but I think they are referencing how SEGA ditched home consoles and is now all software and arcades. From what I have heard they are doing extremely well with arcade machines, especially in Japan. I know they make the popular UFO crane game machines.
misiti3780 11y ago
i completely agree - its not Marissa fault either - steve jobs couldnt have turned that company around. they probably make a lot of money of fantasy sports though - that would be a lucrative brand to acquire; presumably tumblr is worth money also
cft 11y ago
It depends on who is trying to resurrect it: Marissa Meyer or Steve Jobs. Imagine a reality show: Jobs or Musk in 2010 were tasked to turn Yahoo around, and the rules were that they would only have access to Yahoo's internal resources and cash. I would bet with my money buying Yahoo stock that they would reverse the curves.
- TheCowboy 11y ago
  Steve Jobs and Elon Musk each had/have a different focus and drive to achieve different goals that probably have little overlap with Yahoo. They might see their best course of action as immediately resigning after taking a survey of the company, and going on to start a different company. I don't believe that if you just throw enough smart managers at the top of a hierarchy, then eventually it will spit out gold. If anything, that can be problematic. Yahoo, in its current large size, simply may not have the latitude to pivot to the degree required as a publicly traded company, since anything any CEO attempts will draw the ire of activist shareholders. Any major change becomes a large political endeavor.
  - cft 11y ago
    Yahoo had one viable product: Yahoo mail. Instead of botching it, in 2010 they had a chance to make the best Android/iOS email/IM client by throwing a lot of weight behind it. The founders of WhatsApp were from Yahoo after all.
- copperx 11y ago
  Why Musk? His companies aren't profitable.
  - profeta 11y ago
    Musk is bold and not afraid to invest aggressively. but he goes for easy pickings that are encumbered in conflicting laws, which he mostly ignore. He would curl up and cry at yahoo.
- visakanv 11y ago
olalonde 11y ago
Your first sentence reminds me of this speech by Danny DeVito aka "Larry the Liquidator" in "Other People's Money": https://www.youtube.com/watch?v=62kxPyNZF3Q https://www.youtube.com/watch?v=62kxPyNZF3Q
stcredzero 11y ago
they are at the step of brining in Mckinsley consultants, never a terribly good sign So Mckinsley consultants are the nursing home cats of the corporate world? http://nypost.com/2010/01/31/nursing-home-cat-can-predict-impending-death/ http://nypost.com/2010/01/31/nursing-home-cat-can-predict-im...

akg_67 11y ago

Yahoo is textbook example of failure of online "advertising revenue" only company. Most such companies failed in last dot bomb. Only Yahoo survived because it was the largest with decent cash reserves. I am sure another dot bomb like event will take out today's darlings too.

shostack 11y ago

Having watched way too much "House of Lies" where consultants often seem to be brought in to back-up the viewpoint of a given executive and make the case for whatever that person's agenda is...what would such consultants likely be doing in this case in "the real world?" I admittedly haven't had the experience of working with any consultants, so I'm curious for opinions from those who have what happens when they come in during a "typical" engagement of this nature.

anon8418 11y ago
I spent a few years as a management consultant. Consultants are almost never hired to provide truly objective analysis. In most cases, they're hired to "back-up the viewpoint of a given executive". This is done by the executive to hedge the political risk required to go through with their action. They can point to McK when they defend their strategy to the board and then throw them under the bus if things don't pan out. The rewards for the consultant are high fees and living a luxe lifestyle of staying at high end hotels, traveling first class, and dining at michelin starred restaurants (all of course on the client's dime). Plus of course guaranteed future work. Even if the project tanks and the executive is fired, they'll be sure to hire McK again at their next gig. What most people don't realize is that consulting engagements are a careful collaboration between consultant and client. The findings are almost always driven by an iterative process where you go through review cycles with the buyer until you reach your "objective" conclusions, which by the very nature of how the work is performed, is totally subjective and biased. Doubly so for turnaround projects like this one. (not to mention that consultants are constantly trying to recycle previously performed analysis, regardless if it at all fits or applies in the target project). Management consultant is the biggest circlejerk profession. Even moreso IMO than ibanking. Classic self-serving MBA type job. Management consultants are to entrepreneurs what food critics are to chefs.
- rdtsc 11y ago
  Yap pretty much. Remember reading an expose with some examples of how consulting firms would hire fresh grads from Ivy Leagues, and then send them to big companies, for top dollar, (or to other countries like Saudi Arabia) to basically do what you describe -- support the viewpoint of the executive who hired them. Of course all done officially with power point slides, excel spreadsheets and pie charts.
  - anon8418 11y ago
    At the top tier firms, the creation of slides, charts, etc is usually outsourced to a back office dedicated to the job. I'm not sure if this is still the case at McK, but this office used to be stationed in the developing world... Consultants would draw and describe what they wanted, goto bed, and awake to slides, charts in their inbox. Same thing with models. Most firms have "rockstar excel jockeys" (usually analysts/associates/etc.) that are pimped out to project teams to serve this singular role (making models, building business cases, etc.). Management consulting, such a surreal profession...

irishcoffee 11y ago

> What is Yahoo's area of expertise that they make money at and can do better that Google, Microsoft, Facebook or Amazon? Fantasy sports. In much the same way Sega pivoted, Yahoo could.

remarkEon 11y ago
Sega? Edit: is there a story I don't know about? I know a reasonable amount about gaming but I guess I'm drawing a blank on a successful Sega pivot. I remember some cool ads when I was a kid, I suppose.
- Captain_Usher 11y ago
  Sega once participated in the video game industry roughly how Nintendo does today, by producing a home console and making first-party titles for it with their established properties like Sonic the Hedgehog. Sega's consoles definitely have fans, but the company was losing money and Sega did not produce another console after the Dreamcast. Today, they do perfectly fine for themselves by making games as a third-party developer and operating other assorted media ventures like merchandising for anime. They're also a major producer of arcade games.
- pbroderi 11y ago
  Sega has been around quite a while but probably referring to when it discontinued console development and shifted gears to creating games for third-party platforms.
- umanwizard 11y ago
  Sega used to make consoles; now they exclusively make games.
- Abraln 11y ago
  Not the person you are replying to, but I think they are referencing how SEGA ditched home consoles and is now all software and arcades. From what I have heard they are doing extremely well with arcade machines, especially in Japan. I know they make the popular UFO crane game machines.

misiti3780 11y ago

i completely agree - its not Marissa fault either - steve jobs couldnt have turned that company around. they probably make a lot of money of fantasy sports though - that would be a lucrative brand to acquire; presumably tumblr is worth money also

cft 11y ago

It depends on who is trying to resurrect it: Marissa Meyer or Steve Jobs. Imagine a reality show: Jobs or Musk in 2010 were tasked to turn Yahoo around, and the rules were that they would only have access to Yahoo's internal resources and cash. I would bet with my money buying Yahoo stock that they would reverse the curves.

TheCowboy 11y ago
Steve Jobs and Elon Musk each had/have a different focus and drive to achieve different goals that probably have little overlap with Yahoo. They might see their best course of action as immediately resigning after taking a survey of the company, and going on to start a different company. I don't believe that if you just throw enough smart managers at the top of a hierarchy, then eventually it will spit out gold. If anything, that can be problematic. Yahoo, in its current large size, simply may not have the latitude to pivot to the degree required as a publicly traded company, since anything any CEO attempts will draw the ire of activist shareholders. Any major change becomes a large political endeavor.
- cft 11y ago
  Yahoo had one viable product: Yahoo mail. Instead of botching it, in 2010 they had a chance to make the best Android/iOS email/IM client by throwing a lot of weight behind it. The founders of WhatsApp were from Yahoo after all.
copperx 11y ago
Why Musk? His companies aren't profitable.
- profeta 11y ago
  Musk is bold and not afraid to invest aggressively. but he goes for easy pickings that are encumbered in conflicting laws, which he mostly ignore. He would curl up and cry at yahoo.
visakanv 11y ago

olalonde 11y ago

Your first sentence reminds me of this speech by Danny DeVito aka "Larry the Liquidator" in "Other People's Money": https://www.youtube.com/watch?v=62kxPyNZF3Q https://www.youtube.com/watch?v=62kxPyNZF3Q

stcredzero 11y ago

they are at the step of brining in Mckinsley consultants, never a terribly good sign So Mckinsley consultants are the nursing home cats of the corporate world? http://nypost.com/2010/01/31/nursing-home-cat-can-predict-impending-death/ http://nypost.com/2010/01/31/nursing-home-cat-can-predict-im...