37 ms·

Yahoo to Spin Off Its Core Businesses

328 points by _stephan 11y ago

pmlnr 11y ago
The one and only question I need to ask: will flickr stay alive? The rest had been obsolete for a while anyway.
- jscheel 11y ago
  Guessing we are either going to see major changes in pricing structure, or a shutdown of Flickr. Pretty bummed.
  - pmlnr 11y ago
    Flickr has an immense historical value being the first large photo portal. I'd be devastated to see pictures nowhere else can be found going away :(
    - bby 11y ago
      scrape it brother
  - ghaff 11y ago
    Hard to say. There isn't a lot of direct competition. Smugmug probably comes closest (and I see their current pricing structure again makes it reasonable for non-professionals which it wasn't for a time). It really depends on how many people pay for a premium ("pro") flickr account which Yahoo seems to have been fairly ambivalent about collecting over the past few years. Personally, I'd find it something of a bummer if flickr were to go away or seriously decay. I could switch but it would be a definite pain. (I also find flickr a great source of CC photos.)
    - pmlnr 11y ago
      I've been running my own site for displaying images; for backup, I have a dedicated server + synthing. It's the archives I'd really, really miss, from people who more or less stopped taking photos. If Flickr was to offer what Smugmug and 500px does for pros ( like direct upload from Lightroom, eyecandy portfolios, etc. ) instead of focusing on an app that uploads every picture it finds by default, I believe they'd see a return of the many and probable could become profitable. But this would need immediate and massive changes, which I don't think will happen at all.
      - ghaff 11y ago
        You can upload directly from Lightroom using something like jfriedl's plug-in. Works great. I agree that galleries of some sort would be a great addition. I put a lot of photos up on flickr so they're available to myself and others. But I'd like the ability to showcase a more curated collection.
      - DannoHung 11y ago
        Flickr has direct upload from Lightroom... Actually, I think that's built in to Lightroom.
        pmlnr 11y ago
        Lots of thing have Flickr upload; it was just not build by Flickr itself, supporting the professional photographer culture in the first place.
      - ghaff 11y ago
        >It's the archives I'd really, really miss, from people who more or less stopped taking photos. That's fair. The greatest loss if flickr were to go away at some point would be that a lot of content would be permanently removed from the Web. And flickr's scale is such that I can't really imagine something like the archive team being able to copy flickr content and archive it in a useful searchable way. I may be wrong though. Given that there are functioning businesses in the flickr vein, I'm reasonably hopeful it will continue on though. Even if that's wishful thinking on my part.
  - ghaff 11y ago
    If you look at the landscape of "flickr-like" companies, it looks as if you can make a business out of it (Smugmug, 500px) but it's probably not a huge opportunity business given how many such efforts have been shuttered or allowed to largely languish over the past 15 years or so. The reality is that most people are just fine with uploading their camera phone pics to Facebook and be done with it. The number who are willing to spend $25-50 per year for a premium site is probably a pretty small percentage--and would be even smaller if you up that to $100+.
    - rchaud 11y ago
      Part of this may be related to the lack of direct monetization opportunities from Flickr. If you take the example of Instagram, the enormous number of users they have have created, "Instagram celebrities" out of thin air, with people securing modeling contracts or product endorsement deals simply by being popular on the network. I'm sure some photographers are getting business opportunities by posting their work as well, although that has a lot to do with how good they are at getting themselves exposure. Even if
      - ghaff 11y ago
        What the world really needs is another platform for vapid promotion :-) Flickr/Yahoo! have taken some steps related to allowing users to monetize their photos over the years. There's been an agreement with Getty and they've done some other things as well. At its heart, though, flickr started out with very much a community orientation and, while they haven't necessarily done the best job of it, they've maintained more of a community than a commercial flavor. Aside from the young, female, and attractive though, it's pretty hard to commercialize a flickr presence in any significant way. Even microstock sites which are explicitly about selling aren't a great source of income for most.
- drgath 11y ago
  This can be answered by the question "Is Flickr profitable by itself?" If so, someone will certainly buy it. If not, who knows. My guess, someone will buy it and it'll languish for a year or two as the product strategy is developed and migration of technology occurs, then the new vision by new owners will be executed.
  - ghaff 11y ago
    Yahoo has done a pretty good job with the languishing part all on its own. Though, snark aside, I think part of the issue is that it's not entirely clear what a next-generation photo site with a pro/prosumer slant looks like that's different from today. (And, of course, whatever changes you make are going to be hated by some percentage as was the case when flickr went through a redesign a few years back.)
yeukhon 11y ago
Can someone explain why do business like to create new company? What are the benefits for the financial return other than having a book reporting individual revenue? In the end, aren't they going to be under the same parent company, which, if one wishes, can actually challenge and even overrule the child company CEO's decision behind the scene? HP, Google, now Yahoo.
- bastijn 11y ago
  Usually it is because of stock and stakeholders that a company splits, not because a CEO likes to split his or her company. Stakeholders might demand a split so problems with one company might not influence stock price of the second.
- smeyer 11y ago
  If they're fully spinning it out, it isn't just "under the same parent company". They can make two companies each with their own stock, initially distributed to shareholders of the initial company. After that, some stockholders might buy/sell shares of company A and some might buy/sell shares of company B, so that they're truly separate companies with different management and owners and such.
- swingbridge 11y ago
  Sometimes companies have one business that's doing quite well and another that's a real stinker. Shareholders may want to own the good business separately and let the market value that without the drag and risk of having the stinker weighing down on it. In the end the stinker is either dismantled, taken into bankruptcy or sold off. In Yahoo's case it's a bit unique in that the only thing they really have that the market likes is their holdings in other companies. Essentially Yahoo is like a mutual fund that made some good investments but the fund managers are blowing it by running a poorly performing lemonade stand on the side. A lot of the investors just want the holdings and then are happy to let the stinker, Yahoo's original business, just go away. At the moment the market assigns the core business a negative valuation so it's beyond a stinker, it's an anti-company offsetting the value of investment holdings elsewhere under the corporation. It's a real mess.
zingplex 11y ago
It's almost as if Yahoo doesn't know what their core businesses are anymore. It will be interesting to see if they come out of this with better understanding of their identity.
- petercooper 11y ago
  It seems clear to me. They're an investment business that owns shares in successful companies.
  - tacos 11y ago
    Like Yahoo Maps, Yahoo Green, and Tumblr...?
    - mcintyre1994 11y ago
      Probably just Yahoo! Japan and Alibaba.
    - xyzzy4 11y ago
      Tumblr is very culturally significant but not financially successful.
      - tacos 11y ago
        Like that time they told every one of their users that a pending bill in Congress was going to kill Tumblr, set up robocalls that required a single click, and achieved a 0.2% response rate?
      - Redoubts 11y ago
        That's the joke.
PaulHoule 11y ago
It might be better if Merissa Meyer took a long maternity leave.
benmorris 11y ago
I never understood farming out their search engine to Bing in the first place. Google literally prints money with their adwords search business. Seems instead of attempting to innovate they just threw in the towel and gave up? I just find it hard to believe that Google is the only way you can run a successful search engine.
- lmm 11y ago
  Google's search engine runs at a loss to support their advertising business, and haven't had any serious competition in that sector since they bought Doubleclick (which looks a bit antitrusty in my eyes but what do I know). Yahoo doesn't have much of an ad business so there's not a lot of value in running their own search. They're good at their core business of being a portal, with some parts implemented themselves and some parts external (or semi-external e.g. Flickr) integrations.
  - morgante 11y ago
    > Google's search engine runs at a loss to support their advertising business What? I have never heard that AdWords runs at a loss and find it incredibly dubious.
    - grobbles 11y ago
      I believe their argument is "if you ignore the sources of revenue, it runs at a loss", for what that's worth (which is little). The search engine runs ads, and is enormously profitable.
    - xyzzyz 11y ago
      You're misreading what he wrote. It's the ads that bring revenue, and not search. Search is what helps to get people to see relevant ads. Google is not that much in the business of charging people money to provide search services.
    - christophilus 11y ago
      I think he's saying search itself runs as a loss-leader to get people into their hugely profitable AdWords product. In other words, they spend money in search in order to make money via ads. But yeah. The two go hand in hand, so I'm not sure I'd say search is a loss-leader.
ebbv 11y ago
So now Yahoo stock is basically going to be a faux Ali Baba stock. This totally seems like a healthy thing and evidence that there is nothing at all wrong with our market system.
- colinplamondon 11y ago
  This seems like an unprecedented situation. They much set $25,000,000,000 on fire at the same time that they made $29,000,000,000 on a great investment. A company makes an amazing, generation defining large bet on a startup in a fantastic market. Which pays off as one of the best investments in history. That same company then proceeds to do _nothing_ with its actual business. It purchases a series of tiny startups that go _absolutely nowhere_, the acquired talent of which create _zero value_. And, simultaneously, new, younger competitors start eating their lunch in every one of their established markets. If that's not unprecedented, I'd love to hear the other example. That situation would have to be just as fascinating.
- sjg007 11y ago
  I guess you can play arbitrage between the two stock markets.
wiremine 11y ago
Honest question: what has been Yahoo's core business for the last 15 years?
- jrcii 11y ago
  Their answer is "media" but I'm not sure what that means and apparently they aren't either.
  - tootie 11y ago
    My tech company has a media department. I've been in meetings with them. I still have no idea what they do.
- AznHisoka 11y ago
  Eyeballs.
- carrier_lost 11y ago
  Their latest quarterly report summary offers plenty of details: http://biz.yahoo.com/e/151105/yhoo10-q.html http://biz.yahoo.com/e/151105/yhoo10-q.html
  - alanning 11y ago
    Thanks for the link. Here's the description from their Overview (cleaned up a bit): "Yahoo! Inc., together with its consolidated subsidiaries is a guide focused on informing, connecting, and entertaining our users. By creating highly personalized experiences for our users, we keep people connected to what matters most to them, across devices and around the world. In turn, we create value for advertisers by connecting them with the audiences that build their businesses. For advertisers, the opportunity to be a part of users' digital habits across products and platforms is a powerful tool to engage audiences and build brand loyalty. Advertisers can build their businesses through advertising to targeted audiences on our online properties and services or through a distribution network of third party entities who integrate our advertising offerings into their websites or other offerings. Our revenue is generated principally from search and display advertising." Reading that was a bit strange to me as it doesn't fit with my image of Yahoo. From that description, it seems they think of themselves as a social network + ad platform. I'm finding it a bit hard to clarify what my image of Yahoo exactly is but its not that.
panglott 11y ago
https://en.wikipedia.org/wiki/List_of_Yahoo!-owned_sites_and_services https://en.wikipedia.org/wiki/List_of_Yahoo!-owned_sites_and... What a graveyard.
peteretep 11y ago
So they're selling Alibaba, but doing it the other way around.
FussyZeus 11y ago
Oh just give this poor old dog the old Yeller treatment already. I don't know what's more sad, the fact that Yahoo has fallen from where it once was, or that it's falling so slowly and that it's new CEO, once thought to be it's saving grace, is letting the bleeding continue for seemingly as long as she possibly can. I can't imagine the morale issues in the trenches of Yahoo, it's gotta be just horrible in there.
- mattlutze 11y ago
  As a sidebar, I've always kinda felt the name gets in the way. Yahoo! I feel silly saying it. I feel silly asking someone if they Yahoo!? It feels silly seeing it on stock tickers. Do I want to invest in a silly business? Work for a silly business? The answers are yes and yes in an objective world, if the company is producing interesting products that are selling. But when it comes to marketing to users, investors and future employees alike, I'm not so sure it isn't a small hurdle in the way of that conversation.
  - jeffwass 11y ago
    Interesting comment, but does sample size of 1 mean times have changed? I remember reading a tech trade rag back in the late 90's where some consulting company or other was talking about their business. They were getting tons of requests to help provide branding and corporate identity for tech clients. Apparently "Yahoo" was the gold standard, and everybody and their cousin wanted a name or trademark or other branding component akin to Yahoo.
  - morgante 11y ago
    As opposed to Google, which has a super staid and boring name.
    - morinted 11y ago
      At least Google doesn't have a sound bite of yodelling.
      - 11y ago
chollida1 11y ago
Yahoo had to do this. They had been hanging onto the belief that the IRS wouldn't tax their Alibaba spin out, a belief that they and their tax accountants alone believed. Most telling is that Yahoo was up after the markets closed on this news. Heck Bloomberg just sent me a note saying the sentiment of the news on Yahoo was very positive, even the machines like this news:) Sadly this probably means 3 things are going to happen in the next 6 months: 1) The CEO leaves, and is replaced by an interm CEO from a PE firm who will negotiate the wind down of Yahoo. 2) There will be a lot of companies coming to look at Yahoo. If a deal can be done quickly then I don't think there will be layoffs right away. If no deal can be reached quickly then in 6 months I'll bet there is a very large round of layoffs as the company shutters what it can't sell to make the rest of Yahoo look more appetizing. 3) If Alibaba buys the holding portion of Yahoo( Alibaba and Yahoo Japan) then look for Alibaba to seek to acquire the rest of Yahoo Japan. From teh article: > Yahoo’s shift in strategy comes as Ms. Mayer and her husband, Zachary Bogue, are expecting the birth of twin daughters this month I hope she takes a full year off, if not more. The past 4 years couldn't have been easy on her. It will be interesting to see what she does next. It's clear she's great at product design and not so good at people skills. Unfortunately, that doesn't fit well with becoming a CEO again.
- plinkplonk 11y ago
  "Sadly this probably means 3 things are going to happen in the next 6 months" (Genuine question, not snark). Why "sadly"? Companies, even technical companies, get obsolescent and die all the time. Maybe it is just Yahoo's time to go.
  - fluxquanta 11y ago
    I can't speak for chollida1, but for me as an "older millennial" (28) Yahoo was how I came to discover the internet. Between the chats, instant messenger, search before Google, multiplayer games online with strangers (albeit simple ones like chess and poker), and Geocities it was my first taste of the types of things I do online to this day. I think it's okay to mourn a bit for how we remember the company.
voltagex_ 11y ago
Again I ask, where should I take ~30GB of photos that I have on Flickr? Yes, I have other backups but I need offsite storage. Guess I'll have to budget for it now. Backblaze B2 isn't quite ready yet.
- vonklaus 11y ago
  you could put them on mega.co for free up to 50GB, or a 14.00 flash drive or instagram. I don't think cloud storage or image hosting are unsolved problems.
- pmlnr 11y ago
  Serious answer: digitalocean gives you a 40GB VPS for 20$/m and you can spin up an Owncloud instance in minutes.
  - BinaryIdiot 11y ago
    A single VPS for backing up photos? No thanks. Redundancy is going to cost you a lot going this route.
    - pmlnr 11y ago
      He said there are backups already, this is just an addition.
      - BinaryIdiot 11y ago
        He was looking for an off site backup meaning all of his current backups are at a single location. You need redundancy in your offsite backup (or have multiple) otherwise you may have to use it one day and find the drive has died or who knows what else.
  - voltagex_ 11y ago
    Ouch, that reminds me how much more my VPS is going to cost due to the decline in the Australian dollar. It's not a bad idea, though.
vonklaus 11y ago
Paul Graham's What happened to Yahoo[0] is probably just as relevent now as when he wrote it in 2010. > One of the weirdest things about Yahoo when I went to work there was the way they insisted on calling themselves a "media company. That was a bad decision then, but at the time content and media were newer on the internet and had value. They don't anymore. Yahoo finance and fantasy sports are nice things to provide, but they aren't a google killer for sure. Yahoo's core business is media not technology. If the NYT and Wall Street Journal are any indication, media is a bad business to be in. [0]http://www.paulgraham.com/yahoo.html http://www.paulgraham.com/yahoo.html
- strictnein 11y ago
  Wish I could find the article I read this in (googling around has failed me), but I believe around 2010 they also started bringing in execs and business people from Hollywood/MSM and there was a big clash of cultures.
  - T-A 11y ago
    The first Hollywood connection surfaced by my quick googling is the Semel arc, 2001-2007: http://www.cnet.com/news/yahoos-ceo-reaches-out-to-hollywood/ http://www.cnet.com/news/yahoos-ceo-reaches-out-to-hollywood... http://www.cnet.com/news/google-vs-yahoo-clash-of-cultures-1/ http://www.cnet.com/news/google-vs-yahoo-clash-of-cultures-1... http://www.wired.com/2007/02/yahoo-3/ http://www.wired.com/2007/02/yahoo-3/ http://metue.com/06-18-2007/yahoo-ceo/ http://metue.com/06-18-2007/yahoo-ceo/ The Wired article looks particularly painful. If memory serves, Yahoo first declined to buy proto-Google for one million. Then again in 2002 for 5 billion.
    - jleader 11y ago
      Pretty much everyone with a million dollars laying around declined to spend it on acquiring Google back then, it's not like Yahoo was the only company they approached.
  - discardorama 11y ago
    Terry Semel himself was from Hollywood, and he took over in 2001.
netcan 11y ago
I'm not sure I quite understand. The article puts Yahoo's Alibaba stake at 31bn. Google finance is reporting Yahoo's market cap as 32.75bn. Does this mean that Yahoo's non-Alibaba value is a rounding error?
- tptacek 11y ago
  You're forgetting Yahoo Japan, a separate company that Yahoo owns a stake in. According to the numbers, Yahoo's core Internet businesses have been worth less than zero. http://www.bloombergview.com/articles/2014-04-17/how-can-yahoo-be-worth-less-than-zero http://www.bloombergview.com/articles/2014-04-17/how-can-yah...
  - ddlatham 11y ago
    And don't forget $5B in cash.
- cmdkeen 11y ago
  It may be worth that but as stated in the article it can't be realised without tax bill potentially up to $10bn.
  - deleted 11y ago
    [deleted]
  - netcan 11y ago
    OK. That makes a little more sense. The market might be valuing that at 5bn or so.
    - fredkbloggs 11y ago
      If you work out the math, Yahoo could sell those assets, take the tax hit (whether or not the tax is legally owed is irrelevant), then by shutting down the entire company, hand its shareholders several dollars per share more in cash than the market currently values the share. It's possible that some shareholders would realize significant capital gains on that, and the taxes would offset part or all of the profit. But of course other shareholders would not only make a profit, but would also have a fat capital loss to go with it. It just depends on when they bought the shares and what they paid. Overall, though, when one factors in all the tax effects, the market is assigning a negative value to Yahoo proper. Why? Because they, quite reasonably, assume that Yahoo proper will chew up the cash that's currently on the books and any that is obtained via asset sales. That is, should the shareholders ever receive a dividend of any kind, it is likely to be the current cash value of the company less some large fraction wasted between now and whenever that might hypothetically happen. Bluntly, if the company were being valued as a going concern, the market would be pricing it a lot lower even than it is. The only reason for the share's relatively high price is the expectation that some kind of spinoff will happen to allow the shareholders to receive a larger fraction of the value of the company's assets than they would if the company sold those assets itself and used the capital to continue its own operations. In the latter event, one must reasonably assume the ultimate return to shareholders would be very close to zero (an eventual sale of the rotted carcass to private equity) or zero (bankruptcy).
spinchange 11y ago
To come in as an outsider and try to save an ailing web giant nearly everyone had already written off is no easy feat. Wall St. is valuing things like Tumblr at zero and so now she has to do a 180 and unwind this company, maximally and efficiently, while pregnant with twins. Naturally we're inclined to armchair QB, but I think the hand she took over when she sat down at the table was bad. While she never went "all in" on a moonshot, that would have been a literal gamble, and she played smart. Wall Street can be inefficient. Core Yahoo is worth more than nothing.
- briandear 11y ago
  I hope she doesn't think she's going to be working from home.
- forgetsusername 11y ago
  >To come in as an outsider She's a Silicon Valley darling; in what way was she an outsider? >I think the hand she took over when she sat down at the table was bad. I agree with this. >she played smart But not this. During her tenure the company treaded water for a few years, lost nearly all value, and now might be looking to break itself up. Is this the standard we should be holding high-profile, high-priced executives to?
  - spinchange 11y ago
    An outsider to Yahoo, not Silicon Valley. This feeds into point 2. She didn't make Yahoo a media company, it was already one when she got there. The smart part is meant as not gambling on a Carly Fiorina-type merger to "save" the company. Her deals were smaller and focused, and my contention is she didn't blindly throw capital around (at least in a way that makes headlines) to try to save the company. Value is decided by the capital markets, and I still believe core Yahoo is not worthless, whatever it's problems or other management issues. (edits for spelling, slight re-phrasing of last point)
    - sremani 11y ago
      What I consider her accomplishments, 1. Firefox deal 2. NFL Live on Yahoo! 3. negotiating out of the search agreement with MSFT is considered as accomplishment by some (not by me) If Ms.Mayer is able to sell Yahoo! assets to Google in a profitable way for shareholders, that would be a WIN, without it, her regime is a failure not a total failure, but a failure none the less.
aswanson 11y ago
Yahoo purchased viaweb which made YC possible. The startup community owes yahoo a lot.
- mkagenius 11y ago
  Throw in Whatsapp too there then ;)
clavalle 11y ago
Yahoo is the Motorola of the Internet Sector. Always playing catch up in an industry that is lead or die. Good to great engineers with failed leadership trying to coast on past success then, when the stuff hits the fan, trying to effect a culture change on a bloated structure. Finally, the sell off.
- sirkneeland 11y ago
  Also add Palm, BlackBerry, Nokia to that list...
crudbug 11y ago
Yahoo management lacks vision. They had the most popular brand names in social media space, still couldn't innovate. 1. Messenger 2. Mail 3. Flickr 4. Tumblr
- profeta 11y ago
  the funny part is, if you mixed messenger, mail and flickr (let's not forget geocities, delicious and 60% of all online stores before 2006) they could have what facebook is still trying out to be and then some.
  - crudbug 11y ago
    True ! This makes the argument event better :)
- dingaling 11y ago
  5. Groups, which was insanely massive and even after the botched Neo "upgrade" is still the mechanism for the exchange of vast amounts of information.
- dkarapetyan 11y ago
  Yahoo used to have awesome technology. Their developer tools were unmatched and have yet to be matched. Yahoo pipes alone was basically IFFT and AWS Lambda combined way before any of those two existed. They just squandered away all the talent.
joefarish 11y ago
It's core business is owning Alibaba shares, no?
username223 11y ago
When Yahoo finally dies, my main concern is what happens to the @yahoo.com email address I've had for a couple of decades, and which now lives next to my name in countless address books. Does it perpetually forward to an address I choose? Does Yahoo try to charge for this? Do Russian identity thieves buy the domain and make my life hell?
- drgath 11y ago
  Entirely dependent on who decides to buy Y! Mail. Safe to assume it'll be around for a while though, since straight killing Y! Mail doesn't make much business sense.
  - mortenjorck 11y ago
    If Yahoo could find a way to start charging for legacy Yahoo email addresses without enraging a sufficient portion of the installed base, they could have a pretty lucrative business right there.
- brewdad 11y ago
  I've got a list of maybe 50 accounts including a couple of relatively important ones that still use my Yahoo address. It's been on my todo list for months to get them updated. I guess it's time to bump up the priority on that item.
  - marcosdumay 11y ago
    I've tried moving away from my Yahoo account a couple of times already. Some services simply refuse to change your email address, no matter what.
- lmm 11y ago
  Probably the last one - look at what happened to Geocities.
- Karunamon 11y ago
  There's a bunch of smart TV's out there that are tied to Yahoo services (Vizio at least, probably others) for basic things like app installation. I hope they at least transition smoothly...
aswanson 11y ago
Watching Mayer on CNBC right now. Really sad, she has that 1000 yard stare look in her eyes.
- thomasjudge 11y ago
  I don't like this expression, but weren't the "optics" of that just terrible? She looked and sounded really really tired. The Chairman is not telegenic AT ALL. And they were sitting about as far apart from each other as possible while being at the same desk.
  - aswanson 11y ago
    Yeah, the body language, positioning, phrasing....her constantly referring to what the board was going to do..it was just a bad look.
    - sirkneeland 11y ago
      She probably IS really tired (between the demands of pregnancy and the late-night boardroom fighting). And she's probably dealing with a lot of anger around not getting to do her turnaround. Whether they were working or not, she was surely emotionally invested in her efforts to rebuild Yahoo as a company and now that is being rejected. It's devastating when you are pouring your heart and soul into something and then the company just kills it and it's beyond your control. I'm sure a lot of us have been through that (I've been through it twice now, at Palm when HP killed webOS, and at Nokia when they announced they were giving up on phones), and I don't think it's any easier at the top level. Though those eye-watering golden parachutes can't hurt...
      - nickpsecurity 11y ago
        That's how Im reading it. She put up a great fight and did better than I expected her to do. Every aspect of the job would've been a fight. I'd have only done it if I was paid plenty on entry and exit. She's gonna need quite a vacation after this.
cronjobber 11y ago
Respect, old boy Cringely actually got this one right: http://www.cringely.com/2015/11/30/soylent-green-now-made-with-more-women/ http://www.cringely.com/2015/11/30/soylent-green-now-made-wi...
- draw_down 11y ago
  Yes, he called it.
- trimbo 11y ago
  Thanks for posting this. Great analysis about IBM and Google Cloud in this article as well.
  - selimthegrim 11y ago
    http://www.cringely.com/2015/10/21/why-yahoo-is-worth-less-than-nothing/ http://www.cringely.com/2015/10/21/why-yahoo-is-worth-less-t...
ChuckMcM 11y ago
Certainly the end of the beginning. Yahoo!, one of perhaps a handful of companies, was the first "Internet"[1]. Those companies blazed an interesting trail and brought the mainstream population of the US into the "online" world. That they emerged across the chasm that was the dot.com crash, was a testament to the amount of momentum they carried with them. I have a tremendous amount of respect for them, but even with Marissa at the helm the biggest challenge they have not seemed able to overcome, was to tranform into something more 'web 3.0' ish. I would not be surprised in the slightest if Microsoft spun out Bing as a subsidiary, and absorbed the assets and IP of Yahoo! into their own search centered business with a portal attached. By resizing that combined business to be profitable based on the search and ad revenue I expect the case could be made for that as a long lived entity that remains when Google implodes. And having an already separate (or separable) would allow Microsoft to step away to avoid anti-trust concerns while keeping a partial interest to capture the value appreciation. [1] the 0th Internet was what emerged right after HTTP started propagating, GNN, bookmarks etc.
- peter303 11y ago
  MicroSoft made a major bid for Yahoo several years ago, but Yang want more money. MicroSoft hoped there would be synergy between combining MSN and Yahoo.
- finnh 11y ago
  When/why do you expect Google to implode?
  - ChuckMcM 11y ago
    Google has been losing margin (hence profitability) in its search advertising business that powers everything it does fairly rapidly over the last 6 years. They have kept revenue/cash flow going/improving over that same period by putting more and more ads on their properties, dumping things which aren't making money, and trying really hard to push many of the moonshot projects into profitability. During the same 6 years Microsoft has been reporting growing margins on its search advertising business and Bing became profitable for the first time not too long ago. The issue for Google is that while their search is good, Microsoft has crossed over into the "good enough" space (for the customers, advertisers) and the product (people using the service) are less and less likely to force switch the search engine default to Google. Worse, the back stop efforts that Google has been doing to protect revenue growth have caused many long time users to become dissatisfied with their user experience. Google's portal portfolio (News, Finance, G+, Pictures, and Blogger) and cloud offering (GCE) have not kept up with other offerings in the space they are losing share. All of that summarizes to "web services are becoming commodities" and while profitable (as Bing has demonstrated) it's not going to continue to be profitable enough for Google to do that and any of the other projects that 90% of the other employees work on. So first Google will start reporting down quarters because no matter how many ads they cram on a page it doesn't improve their RPM, then start cutting projects internally left and right to cut costs, and then they start cutting more of the benefits, and then they start downsizing groups to stay within the 'profitable' envelope, and like a main sequence star that has run out of hydrogen to burn, the collapse to white dwarf has begun. What Alphabet does at that point will be interesting, but their margins on the G business will only be sufficient to support the G business and not anything else. If they aren't making any money elsewhere then poof. So when? Can't say, really it depends on them being able to pull out into a sustainable business model on the lower margins of commoditized search. Google seems to understand the threat to the business (given their moves, like Alphabet, changing CFOs Etc.). And they are really smart so if there is a way out they may be able to find it, and they have enough cash to "coast" for a long time (look how long Yahoo has coasted right?) But a lot of these things end up being additive, the shine goes off of working there, a lot of solid people leave and then you can lose the ability to change fast enough to avoid your fate. Companies that pull it off (re-inventing themselves) are much rarer than companies that auger into the ground.
deleted 11y ago
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ArtDev 11y ago
Yahoo bought my favorite task manager, and killed it. Yahoo bought Flickr, and has been slowly killing it for years. Yahoo bought delicious.com, said they were going to kill it, but later sold it. Most of the users that left never came back. Has Yahoo done anything worthwhile in the last 15 years besides disrupt innovation in a bad way?
- sirkneeland 11y ago
  While we're at it, they also bought and ruined my second favorite Android launcher, Aviate!
- ghaff 11y ago
  In the case of delicious, in all fairness, the whole tagging/folksonomies thing ended up being pretty much a passing fad. (Though I do use pinboard myself and find it useful.)
intrasight 11y ago
Used Yahoo paid email for several years in the 00s. I've not used Yahoo for anything else. Never did understand what is their business model.
- profeta 11y ago
  remember how you used everything form yahoo when you were first online? well, there are billions of people just getting their first online experience.
  - deleted 11y ago
    [deleted]
craigasketch 11y ago
Is this a harbinger for darker times to come? Or is it simply Yahoo's time finally? I think there is still value in Yahoo it's just expectations vs market reality to me are at odds. I don't know what I'll set my grandma's homepage to now.
barretts 11y ago
Any reason I shouldn't see this as a complicated tax dodge? Simply more multinational pilfering from public coffers? Why shouldn't the Alibaba capital gains be taxed?
- fredkbloggs 11y ago
  I assume your question was intended as rhetorical, but there's an actual answer to it: because when the owner of the Yahoo stock (or a hypothetical Yahoo holding company for Alibaba stock) sells his shares, he will pay tax on his gain from that holding. To turn the question on its head: why should some capital gains be taxed twice and others once (or in rare cases, three times or not at all)?
pitt1980 11y ago
what multiple of its earnings was Yahoo trading at at the height of its glory? given that we now know the postscript (or at least much of it) did that multiple make any sense?
- ghaff 11y ago
  Undefined. Yahoo was one of the first big Internet companies in the late 1990s to make you shake your head and go "This must be a bubble." They had some ridiculous valuation at a time when they were losing money so P/E doesn't mean anything.
epmatsw 11y ago
I wonder what will happen to their fantasy football product. It's wayyyy better than their competitors
- rchaud 11y ago
  It is odd that Yahoo's stake of the fantasy sports market constantly goes unmentioned while daily fantasy startups like Draft Kings is currently bathing in VC cash and media coverage.
  - epmatsw 11y ago
    You know, that is strange. Yahoo has a much much larger share of the traditional fantasy market, as well as a daily fantasy product. Not sure how the money aspect of it compares with FanDuel or DraftKings, but you would think they'd be able to leverage that in some way. Maybe a smaller spinoff company would be more likely to do something with that
    - rchaud 11y ago
      That's the point I was trying to make. Yahoo has first mover advantage in having their own infrastructure for calculating scores and player statistics, not to mention a large base of users. Surely their fantasy sports products would be of value to companies looking to get a piece of the online sports gambling industry?
  - jonknee 11y ago
    > daily fantasy startups like Draft Kings is currently bathing in VC cash and media coverage. They're currently bathing in legal battles and will probably be out of business in very short order. It's a liability for Yahoo, not an asset to brag about.
    - rchaud 11y ago
      That depends. I thought the same thing would happen to Uber, but they've used their rapid growth and VC money to fund lobbying efforts to change the laws around taxi regulation. As I understand it, these FF startups are attempting to exploit similar loopholes in Internet gambling laws as a short-term fix while they lobby to change the law in their favor.
jonknee 11y ago
Marissa Mayer and Maynard Webb were on CNBC this morning talking about the spin: Part 1: https://amp.twimg.com/v/76b8a5e2-9a6c-40c3-9c1b-e2c8bcf91159 https://amp.twimg.com/v/76b8a5e2-9a6c-40c3-9c1b-e2c8bcf91159 Part 2: https://amp.twimg.com/v/ce42d263-7b9c-4716-8d06-b320ed243606 https://amp.twimg.com/v/ce42d263-7b9c-4716-8d06-b320ed243606 Mayer seems completely bored by the whole thing and keeps passing stuff off to Webb as "board level consideration". Doesn't make me excited for Yahoo whatsoever.
- profeta 11y ago
  OTOH if the CEO is excited about a tax shenanigan i will not be excited by the company.
  - jonknee 11y ago
    Yahoo's stake in Alibaba is by far the most valuable part of Yahoo. The "tax shenanigan" itself is worth more than Yahoo's core business! If she can't get excited about the majority of shareholder value she needs to step down ASAP.
    - profeta 11y ago
      because the CEO can do so much more than an accountant? do you also fire your doctors because they don't pray? the CEO should be rallying troops and making deals. well, at least that is the excuse for their obscene salaries and bonuses.
      - jonknee 11y ago
        > the CEO should be rallying troops and making deals. well, at least that is the excuse for their obscene salaries and bonuses. She looked like she was asleep. Wasn't rallying anyone or making any deals. Did you watch the interview? She was talking about the most important thing she has ever done as a CEO and couldn't care less. She has checked out.
ddlatham 11y ago
What's the difference aside from the tax liability? Either way you wind up with two companies. One with the Alibaba shares, and the other with everything else.
- jackgavigan 11y ago
  There is no difference aside from the potential tax liability but the tax liability is potentially huge. We're talking over $9bn. Matt Levine wrote a good piece on this a week ago: http://www.bloombergview.com/articles/2015-12-02/yahoo-is-looking-for-a-new-way-around-alibaba-taxes http://www.bloombergview.com/articles/2015-12-02/yahoo-is-lo...
  - ddlatham 11y ago
    Totally agree that any shift in the tax liability is significant. But people seem to be discussing many other consequences now: Does this mean the end of Yahoo? Is it being acquired? Are they shutting down Flickr or Tumblr? Why would this change make any difference to those questions?
    - jackgavigan 11y ago
      > Why would this change make any difference to those questions? I don't think it does. I think the difference is that Starboard suggested that Yahoo sell its core business - http://www.wsj.com/articles/starboard-urges-yahoo-to-drop-alibaba-spinoff-plan-1447905535 http://www.wsj.com/articles/starboard-urges-yahoo-to-drop-al... - and Verizon's CFO suggested that they might be interested in buying Yahoo Core if it was put up for sale - http://www.bloomberg.com/news/articles/2015-12-07/verizon-would-explore-yahoo-deal-if-it-made-sense-cfo-says http://www.bloomberg.com/news/articles/2015-12-07/verizon-wo...
      - ddlatham 11y ago
        Right, it sounds like you agree with me. But most of the rest of the comments on this article suggest this is a significantly meaningful change.
jackgavigan 11y ago
I thought Yahoo's stock price would rise on this news (because it removes the uncertainty that was overshadowing the original Aabaco spin-off plan) but, despite a brief opening spike, the stock is down on yesterday's close. On the conference call this morning, the management team sounded really downbeat. I expected them to sound positive and optimistic, talking about unlocking shareholder value and focusing on Yahoo Core but they sounded like somebody had died. As of this moment, the market value of Yahoo's stakes in Alibaba and Yahoo Japan are $32.5bn and $8.67bn respectively, while Yahoo itself has a market cap of $32.37bn. To quote Matt Levine, "the whole point of Yahoo as a company right now is to not pay taxes on Alibaba. [...] If there was a way to avoid paying taxes on the Alibaba shares that involved burning all of Yahoo's actual businesses to the ground, Yahoo should do that all day long, and then do it again the next day. It would still add shareholder value." "And the market, right now, is valuing Yahoo as though it will fail in that mission, which is its only mission." Source: http://www.bloombergview.com/articles/2015-12-02/yahoo-is-looking-for-a-new-way-around-alibaba-taxes http://www.bloombergview.com/articles/2015-12-02/yahoo-is-lo...
dothis 11y ago
Do you guys think our emails on Yahoo mail are safe after this? I will backup mine as soon as I find the time to do so. Yahoo has a terrible track record regarding emails. I already lost one due to inactivity. They gave it to somebody else. That somebody probably has access to several of my accounts now. On websites where I used my Yahoo address and then just forgot about it.
mgalka 11y ago
What I want to know is, how has Yahoo lasted so long? Google has beaten them at search, maps, email, and news. And their homepages is still confusing web 1.0 jumbled mess. What do people still use Yahoo for anyway?
- spikels 11y ago
  Yahoo's survival is a legacy of it's huge success in the late 1990s when it was the most successful company on the Internet. You are likely young and did not experience Yahoo's almost Google like dominance at the time. First, while Yahoo's core "portal" business model was losing market share to search (i.e. Google) the overall market for online advertising was growing rapidly which masked it's weakness for many years. Second, it invested it's huge early profits into the growing Internet both in the US and internationally. Most of these investments were failures but two were HUGE successes: Alibaba and Yahoo Japan. Yes, Yahoo is a declining platform but still has millions of users for all of the things you list. Like it predecessor AOL there is a very long tail as people are creatures of habit and don't like to change email or start page, etc.
  - mgalka 11y ago
    I am old enough to have a yahoo.com email, which I suppose proves your point.
3pt14159 11y ago
So I don't understand one simple thing: The stock is up 120% since Mayer took over. Even adjusting for compounding interest over 3.43 years, this is like 25+% yearly growth. So the core business is crapping out? So what? Why is everyone dumping on Mayer? I don't even think I could fix the core Yahoo business. They have to pay a 50% premium for developers just because it's Yahoo and their core audience is the technically illiterate; a group that is fairly difficult to monetize.
- skylan_q 11y ago
  What's the beta on that stock? Look at it in comparison to other tech stocks. Most of Yahoo's recent rise is explained by the rise in all tech stocks over the last few years.
- 1024core 11y ago
  > The stock is up 120% since Mayer took over. All of that is because of $BABA. If you add up the current value of $BABA and Yahoo Japan shares that Yahoo holds, it's more than the market cap of Yahoo; which means, the $4B/year revenue business that is rest of Yahoo is valued negatively by the market. SMH....
- MadManE 11y ago
  I would venture that it has something to do with Alibaba and not really a lot to do with Yahoo. Yes, it's a good financial call, but it puts all of the control in someone else's hands.
- shas3 11y ago
  Corporate governance is a lot about perceptions. Even if you set aside the fact that most of that growth comes from Yahoo's stake in Alibaba, you still have the question about Yahoo's future and vision. If there is a perception that their future is shaky, that matters more than if things are likely to turn out badly. Should add, IANAL aka, I am no analyst
- joeblau 11y ago
  The stock is up because overall, Yahoo as an overall business is doing great. The problem is that the best financial parts of Yahoo are its investments. If Yahoo was solely an investment company, it would have a great record. Yahoo, however, has the core business which is what most people interact with on a daily basis that loses money. I joked with my friend at the beginning of 2015 that Yahoo performs betters as a VC than as an internet company.
sremani 11y ago
Ms.Mayer took a very difficult job. There is no sense in feeling for her, she knew what she was getting into and she was paid highly as if she already accomplished a turn around. Every thing said and done, Ms.Mayer will have $400 Million, even if Yahoo as we know is Kaput. It is a demonstration that C-level execs do not have skin in the game any more, they are paid like they already accomplished the task they have set to.
crudbug 11y ago
Zuck - If you are here .. Buy Yahoo for Max, Trust me, you will thank me later. :)
kzhahou 11y ago
What's this mean for a company like Polyvore, acquired a couple months ago?
mmanfrin 11y ago
Wait, so since they can't spin off the Alibaba stake tax free, they're going to spin off Yahoo (and pay taxes on that lesser-valued spin off)? Shareholders would then own 'YHOO' which are basically BABA pass-through stocks, and whatever other company Yahoo becomes?
poofyleek 11y ago
Yahoo Core Business valuation is at this point low enough that any one of the Unicorns, e.g. Uber, Airbnb,... could easily afford it. Tumblr could have raised more money to become a bigger Unicorn and could have acquired Yahoo. Absurdity is reality.
ShardPhoenix 11y ago
"The decision not to sell the Alibaba stake, which was reported on Tuesday, was driven by “the market’s perception of tax risk” associated with the Alibaba plan" It's unfortunate that the tax code is so complex that ambiguous "tax risk" is a thing.

328 points by _stephan 11y ago

pmlnr 11y ago

The one and only question I need to ask: will flickr stay alive? The rest had been obsolete for a while anyway.

jscheel 11y ago
Guessing we are either going to see major changes in pricing structure, or a shutdown of Flickr. Pretty bummed.
- pmlnr 11y ago
  Flickr has an immense historical value being the first large photo portal. I'd be devastated to see pictures nowhere else can be found going away :(
  - bby 11y ago
    scrape it brother
- ghaff 11y ago
  Hard to say. There isn't a lot of direct competition. Smugmug probably comes closest (and I see their current pricing structure again makes it reasonable for non-professionals which it wasn't for a time). It really depends on how many people pay for a premium ("pro") flickr account which Yahoo seems to have been fairly ambivalent about collecting over the past few years. Personally, I'd find it something of a bummer if flickr were to go away or seriously decay. I could switch but it would be a definite pain. (I also find flickr a great source of CC photos.)
  - pmlnr 11y ago
    I've been running my own site for displaying images; for backup, I have a dedicated server + synthing. It's the archives I'd really, really miss, from people who more or less stopped taking photos. If Flickr was to offer what Smugmug and 500px does for pros ( like direct upload from Lightroom, eyecandy portfolios, etc. ) instead of focusing on an app that uploads every picture it finds by default, I believe they'd see a return of the many and probable could become profitable. But this would need immediate and massive changes, which I don't think will happen at all.
    - ghaff 11y ago
      You can upload directly from Lightroom using something like jfriedl's plug-in. Works great. I agree that galleries of some sort would be a great addition. I put a lot of photos up on flickr so they're available to myself and others. But I'd like the ability to showcase a more curated collection.
    - DannoHung 11y ago
      Flickr has direct upload from Lightroom... Actually, I think that's built in to Lightroom.
      - pmlnr 11y ago
        Lots of thing have Flickr upload; it was just not build by Flickr itself, supporting the professional photographer culture in the first place.
    - ghaff 11y ago
      >It's the archives I'd really, really miss, from people who more or less stopped taking photos. That's fair. The greatest loss if flickr were to go away at some point would be that a lot of content would be permanently removed from the Web. And flickr's scale is such that I can't really imagine something like the archive team being able to copy flickr content and archive it in a useful searchable way. I may be wrong though. Given that there are functioning businesses in the flickr vein, I'm reasonably hopeful it will continue on though. Even if that's wishful thinking on my part.
- ghaff 11y ago
  If you look at the landscape of "flickr-like" companies, it looks as if you can make a business out of it (Smugmug, 500px) but it's probably not a huge opportunity business given how many such efforts have been shuttered or allowed to largely languish over the past 15 years or so. The reality is that most people are just fine with uploading their camera phone pics to Facebook and be done with it. The number who are willing to spend $25-50 per year for a premium site is probably a pretty small percentage--and would be even smaller if you up that to $100+.
  - rchaud 11y ago
    Part of this may be related to the lack of direct monetization opportunities from Flickr. If you take the example of Instagram, the enormous number of users they have have created, "Instagram celebrities" out of thin air, with people securing modeling contracts or product endorsement deals simply by being popular on the network. I'm sure some photographers are getting business opportunities by posting their work as well, although that has a lot to do with how good they are at getting themselves exposure. Even if
    - ghaff 11y ago
      What the world really needs is another platform for vapid promotion :-) Flickr/Yahoo! have taken some steps related to allowing users to monetize their photos over the years. There's been an agreement with Getty and they've done some other things as well. At its heart, though, flickr started out with very much a community orientation and, while they haven't necessarily done the best job of it, they've maintained more of a community than a commercial flavor. Aside from the young, female, and attractive though, it's pretty hard to commercialize a flickr presence in any significant way. Even microstock sites which are explicitly about selling aren't a great source of income for most.
drgath 11y ago
This can be answered by the question "Is Flickr profitable by itself?" If so, someone will certainly buy it. If not, who knows. My guess, someone will buy it and it'll languish for a year or two as the product strategy is developed and migration of technology occurs, then the new vision by new owners will be executed.
- ghaff 11y ago
  Yahoo has done a pretty good job with the languishing part all on its own. Though, snark aside, I think part of the issue is that it's not entirely clear what a next-generation photo site with a pro/prosumer slant looks like that's different from today. (And, of course, whatever changes you make are going to be hated by some percentage as was the case when flickr went through a redesign a few years back.)

yeukhon 11y ago

Can someone explain why do business like to create new company? What are the benefits for the financial return other than having a book reporting individual revenue? In the end, aren't they going to be under the same parent company, which, if one wishes, can actually challenge and even overrule the child company CEO's decision behind the scene? HP, Google, now Yahoo.

bastijn 11y ago
Usually it is because of stock and stakeholders that a company splits, not because a CEO likes to split his or her company. Stakeholders might demand a split so problems with one company might not influence stock price of the second.
smeyer 11y ago
If they're fully spinning it out, it isn't just "under the same parent company". They can make two companies each with their own stock, initially distributed to shareholders of the initial company. After that, some stockholders might buy/sell shares of company A and some might buy/sell shares of company B, so that they're truly separate companies with different management and owners and such.
swingbridge 11y ago
Sometimes companies have one business that's doing quite well and another that's a real stinker. Shareholders may want to own the good business separately and let the market value that without the drag and risk of having the stinker weighing down on it. In the end the stinker is either dismantled, taken into bankruptcy or sold off. In Yahoo's case it's a bit unique in that the only thing they really have that the market likes is their holdings in other companies. Essentially Yahoo is like a mutual fund that made some good investments but the fund managers are blowing it by running a poorly performing lemonade stand on the side. A lot of the investors just want the holdings and then are happy to let the stinker, Yahoo's original business, just go away. At the moment the market assigns the core business a negative valuation so it's beyond a stinker, it's an anti-company offsetting the value of investment holdings elsewhere under the corporation. It's a real mess.

zingplex 11y ago

It's almost as if Yahoo doesn't know what their core businesses are anymore. It will be interesting to see if they come out of this with better understanding of their identity.

petercooper 11y ago
It seems clear to me. They're an investment business that owns shares in successful companies.
- tacos 11y ago
  Like Yahoo Maps, Yahoo Green, and Tumblr...?
  - mcintyre1994 11y ago
    Probably just Yahoo! Japan and Alibaba.
  - xyzzy4 11y ago
    Tumblr is very culturally significant but not financially successful.
    - tacos 11y ago
      Like that time they told every one of their users that a pending bill in Congress was going to kill Tumblr, set up robocalls that required a single click, and achieved a 0.2% response rate?
    - Redoubts 11y ago
      That's the joke.

PaulHoule 11y ago

It might be better if Merissa Meyer took a long maternity leave.

benmorris 11y ago

I never understood farming out their search engine to Bing in the first place. Google literally prints money with their adwords search business. Seems instead of attempting to innovate they just threw in the towel and gave up? I just find it hard to believe that Google is the only way you can run a successful search engine.

lmm 11y ago
Google's search engine runs at a loss to support their advertising business, and haven't had any serious competition in that sector since they bought Doubleclick (which looks a bit antitrusty in my eyes but what do I know). Yahoo doesn't have much of an ad business so there's not a lot of value in running their own search. They're good at their core business of being a portal, with some parts implemented themselves and some parts external (or semi-external e.g. Flickr) integrations.
- morgante 11y ago
  > Google's search engine runs at a loss to support their advertising business What? I have never heard that AdWords runs at a loss and find it incredibly dubious.
  - grobbles 11y ago
    I believe their argument is "if you ignore the sources of revenue, it runs at a loss", for what that's worth (which is little). The search engine runs ads, and is enormously profitable.
  - xyzzyz 11y ago
    You're misreading what he wrote. It's the ads that bring revenue, and not search. Search is what helps to get people to see relevant ads. Google is not that much in the business of charging people money to provide search services.
  - christophilus 11y ago
    I think he's saying search itself runs as a loss-leader to get people into their hugely profitable AdWords product. In other words, they spend money in search in order to make money via ads. But yeah. The two go hand in hand, so I'm not sure I'd say search is a loss-leader.

ebbv 11y ago

So now Yahoo stock is basically going to be a faux Ali Baba stock. This totally seems like a healthy thing and evidence that there is nothing at all wrong with our market system.

colinplamondon 11y ago
This seems like an unprecedented situation. They much set $25,000,000,000 on fire at the same time that they made $29,000,000,000 on a great investment. A company makes an amazing, generation defining large bet on a startup in a fantastic market. Which pays off as one of the best investments in history. That same company then proceeds to do _nothing_ with its actual business. It purchases a series of tiny startups that go _absolutely nowhere_, the acquired talent of which create _zero value_. And, simultaneously, new, younger competitors start eating their lunch in every one of their established markets. If that's not unprecedented, I'd love to hear the other example. That situation would have to be just as fascinating.
sjg007 11y ago
I guess you can play arbitrage between the two stock markets.

wiremine 11y ago

Honest question: what has been Yahoo's core business for the last 15 years?

jrcii 11y ago
Their answer is "media" but I'm not sure what that means and apparently they aren't either.
- tootie 11y ago
  My tech company has a media department. I've been in meetings with them. I still have no idea what they do.
AznHisoka 11y ago
Eyeballs.
carrier_lost 11y ago
Their latest quarterly report summary offers plenty of details: http://biz.yahoo.com/e/151105/yhoo10-q.html http://biz.yahoo.com/e/151105/yhoo10-q.html
- alanning 11y ago
  Thanks for the link. Here's the description from their Overview (cleaned up a bit): "Yahoo! Inc., together with its consolidated subsidiaries is a guide focused on informing, connecting, and entertaining our users. By creating highly personalized experiences for our users, we keep people connected to what matters most to them, across devices and around the world. In turn, we create value for advertisers by connecting them with the audiences that build their businesses. For advertisers, the opportunity to be a part of users' digital habits across products and platforms is a powerful tool to engage audiences and build brand loyalty. Advertisers can build their businesses through advertising to targeted audiences on our online properties and services or through a distribution network of third party entities who integrate our advertising offerings into their websites or other offerings. Our revenue is generated principally from search and display advertising." Reading that was a bit strange to me as it doesn't fit with my image of Yahoo. From that description, it seems they think of themselves as a social network + ad platform. I'm finding it a bit hard to clarify what my image of Yahoo exactly is but its not that.

panglott 11y ago

https://en.wikipedia.org/wiki/List_of_Yahoo!-owned_sites_and_services https://en.wikipedia.org/wiki/List_of_Yahoo!-owned_sites_and... What a graveyard.

peteretep 11y ago

So they're selling Alibaba, but doing it the other way around.

FussyZeus 11y ago

Oh just give this poor old dog the old Yeller treatment already. I don't know what's more sad, the fact that Yahoo has fallen from where it once was, or that it's falling so slowly and that it's new CEO, once thought to be it's saving grace, is letting the bleeding continue for seemingly as long as she possibly can. I can't imagine the morale issues in the trenches of Yahoo, it's gotta be just horrible in there.

mattlutze 11y ago
As a sidebar, I've always kinda felt the name gets in the way. Yahoo! I feel silly saying it. I feel silly asking someone if they Yahoo!? It feels silly seeing it on stock tickers. Do I want to invest in a silly business? Work for a silly business? The answers are yes and yes in an objective world, if the company is producing interesting products that are selling. But when it comes to marketing to users, investors and future employees alike, I'm not so sure it isn't a small hurdle in the way of that conversation.
- jeffwass 11y ago
  Interesting comment, but does sample size of 1 mean times have changed? I remember reading a tech trade rag back in the late 90's where some consulting company or other was talking about their business. They were getting tons of requests to help provide branding and corporate identity for tech clients. Apparently "Yahoo" was the gold standard, and everybody and their cousin wanted a name or trademark or other branding component akin to Yahoo.
- morgante 11y ago
  As opposed to Google, which has a super staid and boring name.
  - morinted 11y ago
    At least Google doesn't have a sound bite of yodelling.
    - 11y ago

chollida1 11y ago

Yahoo had to do this. They had been hanging onto the belief that the IRS wouldn't tax their Alibaba spin out, a belief that they and their tax accountants alone believed. Most telling is that Yahoo was up after the markets closed on this news. Heck Bloomberg just sent me a note saying the sentiment of the news on Yahoo was very positive, even the machines like this news:) Sadly this probably means 3 things are going to happen in the next 6 months: 1) The CEO leaves, and is replaced by an interm CEO from a PE firm who will negotiate the wind down of Yahoo. 2) There will be a lot of companies coming to look at Yahoo. If a deal can be done quickly then I don't think there will be layoffs right away. If no deal can be reached quickly then in 6 months I'll bet there is a very large round of layoffs as the company shutters what it can't sell to make the rest of Yahoo look more appetizing. 3) If Alibaba buys the holding portion of Yahoo( Alibaba and Yahoo Japan) then look for Alibaba to seek to acquire the rest of Yahoo Japan. From teh article: > Yahoo’s shift in strategy comes as Ms. Mayer and her husband, Zachary Bogue, are expecting the birth of twin daughters this month I hope she takes a full year off, if not more. The past 4 years couldn't have been easy on her. It will be interesting to see what she does next. It's clear she's great at product design and not so good at people skills. Unfortunately, that doesn't fit well with becoming a CEO again.

plinkplonk 11y ago
"Sadly this probably means 3 things are going to happen in the next 6 months" (Genuine question, not snark). Why "sadly"? Companies, even technical companies, get obsolescent and die all the time. Maybe it is just Yahoo's time to go.
- fluxquanta 11y ago
  I can't speak for chollida1, but for me as an "older millennial" (28) Yahoo was how I came to discover the internet. Between the chats, instant messenger, search before Google, multiplayer games online with strangers (albeit simple ones like chess and poker), and Geocities it was my first taste of the types of things I do online to this day. I think it's okay to mourn a bit for how we remember the company.

voltagex_ 11y ago

Again I ask, where should I take ~30GB of photos that I have on Flickr? Yes, I have other backups but I need offsite storage. Guess I'll have to budget for it now. Backblaze B2 isn't quite ready yet.

vonklaus 11y ago
you could put them on mega.co for free up to 50GB, or a 14.00 flash drive or instagram. I don't think cloud storage or image hosting are unsolved problems.
pmlnr 11y ago
Serious answer: digitalocean gives you a 40GB VPS for 20$/m and you can spin up an Owncloud instance in minutes.
- BinaryIdiot 11y ago
  A single VPS for backing up photos? No thanks. Redundancy is going to cost you a lot going this route.
  - pmlnr 11y ago
    He said there are backups already, this is just an addition.
    - BinaryIdiot 11y ago
      He was looking for an off site backup meaning all of his current backups are at a single location. You need redundancy in your offsite backup (or have multiple) otherwise you may have to use it one day and find the drive has died or who knows what else.
- voltagex_ 11y ago
  Ouch, that reminds me how much more my VPS is going to cost due to the decline in the Australian dollar. It's not a bad idea, though.

vonklaus 11y ago

Paul Graham's What happened to Yahoo[0] is probably just as relevent now as when he wrote it in 2010. > One of the weirdest things about Yahoo when I went to work there was the way they insisted on calling themselves a "media company. That was a bad decision then, but at the time content and media were newer on the internet and had value. They don't anymore. Yahoo finance and fantasy sports are nice things to provide, but they aren't a google killer for sure. Yahoo's core business is media not technology. If the NYT and Wall Street Journal are any indication, media is a bad business to be in. [0]http://www.paulgraham.com/yahoo.html http://www.paulgraham.com/yahoo.html

strictnein 11y ago
Wish I could find the article I read this in (googling around has failed me), but I believe around 2010 they also started bringing in execs and business people from Hollywood/MSM and there was a big clash of cultures.
- T-A 11y ago
  The first Hollywood connection surfaced by my quick googling is the Semel arc, 2001-2007: http://www.cnet.com/news/yahoos-ceo-reaches-out-to-hollywood/ http://www.cnet.com/news/yahoos-ceo-reaches-out-to-hollywood... http://www.cnet.com/news/google-vs-yahoo-clash-of-cultures-1/ http://www.cnet.com/news/google-vs-yahoo-clash-of-cultures-1... http://www.wired.com/2007/02/yahoo-3/ http://www.wired.com/2007/02/yahoo-3/ http://metue.com/06-18-2007/yahoo-ceo/ http://metue.com/06-18-2007/yahoo-ceo/ The Wired article looks particularly painful. If memory serves, Yahoo first declined to buy proto-Google for one million. Then again in 2002 for 5 billion.
  - jleader 11y ago
    Pretty much everyone with a million dollars laying around declined to spend it on acquiring Google back then, it's not like Yahoo was the only company they approached.
- discardorama 11y ago
  Terry Semel himself was from Hollywood, and he took over in 2001.

netcan 11y ago

I'm not sure I quite understand. The article puts Yahoo's Alibaba stake at 31bn. Google finance is reporting Yahoo's market cap as 32.75bn. Does this mean that Yahoo's non-Alibaba value is a rounding error?

tptacek 11y ago
You're forgetting Yahoo Japan, a separate company that Yahoo owns a stake in. According to the numbers, Yahoo's core Internet businesses have been worth less than zero. http://www.bloombergview.com/articles/2014-04-17/how-can-yahoo-be-worth-less-than-zero http://www.bloombergview.com/articles/2014-04-17/how-can-yah...
- ddlatham 11y ago
  And don't forget $5B in cash.
cmdkeen 11y ago
It may be worth that but as stated in the article it can't be realised without tax bill potentially up to $10bn.
- deleted 11y ago
  [deleted]
- netcan 11y ago
  OK. That makes a little more sense. The market might be valuing that at 5bn or so.
  - fredkbloggs 11y ago
    If you work out the math, Yahoo could sell those assets, take the tax hit (whether or not the tax is legally owed is irrelevant), then by shutting down the entire company, hand its shareholders several dollars per share more in cash than the market currently values the share. It's possible that some shareholders would realize significant capital gains on that, and the taxes would offset part or all of the profit. But of course other shareholders would not only make a profit, but would also have a fat capital loss to go with it. It just depends on when they bought the shares and what they paid. Overall, though, when one factors in all the tax effects, the market is assigning a negative value to Yahoo proper. Why? Because they, quite reasonably, assume that Yahoo proper will chew up the cash that's currently on the books and any that is obtained via asset sales. That is, should the shareholders ever receive a dividend of any kind, it is likely to be the current cash value of the company less some large fraction wasted between now and whenever that might hypothetically happen. Bluntly, if the company were being valued as a going concern, the market would be pricing it a lot lower even than it is. The only reason for the share's relatively high price is the expectation that some kind of spinoff will happen to allow the shareholders to receive a larger fraction of the value of the company's assets than they would if the company sold those assets itself and used the capital to continue its own operations. In the latter event, one must reasonably assume the ultimate return to shareholders would be very close to zero (an eventual sale of the rotted carcass to private equity) or zero (bankruptcy).

spinchange 11y ago

To come in as an outsider and try to save an ailing web giant nearly everyone had already written off is no easy feat. Wall St. is valuing things like Tumblr at zero and so now she has to do a 180 and unwind this company, maximally and efficiently, while pregnant with twins. Naturally we're inclined to armchair QB, but I think the hand she took over when she sat down at the table was bad. While she never went "all in" on a moonshot, that would have been a literal gamble, and she played smart. Wall Street can be inefficient. Core Yahoo is worth more than nothing.

briandear 11y ago
I hope she doesn't think she's going to be working from home.
forgetsusername 11y ago
>To come in as an outsider She's a Silicon Valley darling; in what way was she an outsider? >I think the hand she took over when she sat down at the table was bad. I agree with this. >she played smart But not this. During her tenure the company treaded water for a few years, lost nearly all value, and now might be looking to break itself up. Is this the standard we should be holding high-profile, high-priced executives to?
- spinchange 11y ago
  An outsider to Yahoo, not Silicon Valley. This feeds into point 2. She didn't make Yahoo a media company, it was already one when she got there. The smart part is meant as not gambling on a Carly Fiorina-type merger to "save" the company. Her deals were smaller and focused, and my contention is she didn't blindly throw capital around (at least in a way that makes headlines) to try to save the company. Value is decided by the capital markets, and I still believe core Yahoo is not worthless, whatever it's problems or other management issues. (edits for spelling, slight re-phrasing of last point)
  - sremani 11y ago
    What I consider her accomplishments, 1. Firefox deal 2. NFL Live on Yahoo! 3. negotiating out of the search agreement with MSFT is considered as accomplishment by some (not by me) If Ms.Mayer is able to sell Yahoo! assets to Google in a profitable way for shareholders, that would be a WIN, without it, her regime is a failure not a total failure, but a failure none the less.

aswanson 11y ago

Yahoo purchased viaweb which made YC possible. The startup community owes yahoo a lot.

mkagenius 11y ago
Throw in Whatsapp too there then ;)

clavalle 11y ago

Yahoo is the Motorola of the Internet Sector. Always playing catch up in an industry that is lead or die. Good to great engineers with failed leadership trying to coast on past success then, when the stuff hits the fan, trying to effect a culture change on a bloated structure. Finally, the sell off.

sirkneeland 11y ago
Also add Palm, BlackBerry, Nokia to that list...

crudbug 11y ago

Yahoo management lacks vision. They had the most popular brand names in social media space, still couldn't innovate. 1. Messenger 2. Mail 3. Flickr 4. Tumblr

profeta 11y ago
the funny part is, if you mixed messenger, mail and flickr (let's not forget geocities, delicious and 60% of all online stores before 2006) they could have what facebook is still trying out to be and then some.
- crudbug 11y ago
  True ! This makes the argument event better :)
dingaling 11y ago
5. Groups, which was insanely massive and even after the botched Neo "upgrade" is still the mechanism for the exchange of vast amounts of information.
dkarapetyan 11y ago
Yahoo used to have awesome technology. Their developer tools were unmatched and have yet to be matched. Yahoo pipes alone was basically IFFT and AWS Lambda combined way before any of those two existed. They just squandered away all the talent.

joefarish 11y ago

It's core business is owning Alibaba shares, no?

username223 11y ago

When Yahoo finally dies, my main concern is what happens to the @yahoo.com email address I've had for a couple of decades, and which now lives next to my name in countless address books. Does it perpetually forward to an address I choose? Does Yahoo try to charge for this? Do Russian identity thieves buy the domain and make my life hell?

drgath 11y ago
Entirely dependent on who decides to buy Y! Mail. Safe to assume it'll be around for a while though, since straight killing Y! Mail doesn't make much business sense.
- mortenjorck 11y ago
  If Yahoo could find a way to start charging for legacy Yahoo email addresses without enraging a sufficient portion of the installed base, they could have a pretty lucrative business right there.
brewdad 11y ago
I've got a list of maybe 50 accounts including a couple of relatively important ones that still use my Yahoo address. It's been on my todo list for months to get them updated. I guess it's time to bump up the priority on that item.
- marcosdumay 11y ago
  I've tried moving away from my Yahoo account a couple of times already. Some services simply refuse to change your email address, no matter what.
lmm 11y ago
Probably the last one - look at what happened to Geocities.
Karunamon 11y ago
There's a bunch of smart TV's out there that are tied to Yahoo services (Vizio at least, probably others) for basic things like app installation. I hope they at least transition smoothly...

aswanson 11y ago

Watching Mayer on CNBC right now. Really sad, she has that 1000 yard stare look in her eyes.

thomasjudge 11y ago
I don't like this expression, but weren't the "optics" of that just terrible? She looked and sounded really really tired. The Chairman is not telegenic AT ALL. And they were sitting about as far apart from each other as possible while being at the same desk.
- aswanson 11y ago
  Yeah, the body language, positioning, phrasing....her constantly referring to what the board was going to do..it was just a bad look.
  - sirkneeland 11y ago
    She probably IS really tired (between the demands of pregnancy and the late-night boardroom fighting). And she's probably dealing with a lot of anger around not getting to do her turnaround. Whether they were working or not, she was surely emotionally invested in her efforts to rebuild Yahoo as a company and now that is being rejected. It's devastating when you are pouring your heart and soul into something and then the company just kills it and it's beyond your control. I'm sure a lot of us have been through that (I've been through it twice now, at Palm when HP killed webOS, and at Nokia when they announced they were giving up on phones), and I don't think it's any easier at the top level. Though those eye-watering golden parachutes can't hurt...
    - nickpsecurity 11y ago
      That's how Im reading it. She put up a great fight and did better than I expected her to do. Every aspect of the job would've been a fight. I'd have only done it if I was paid plenty on entry and exit. She's gonna need quite a vacation after this.

cronjobber 11y ago

Respect, old boy Cringely actually got this one right: http://www.cringely.com/2015/11/30/soylent-green-now-made-with-more-women/ http://www.cringely.com/2015/11/30/soylent-green-now-made-wi...

draw_down 11y ago
Yes, he called it.
trimbo 11y ago
Thanks for posting this. Great analysis about IBM and Google Cloud in this article as well.
- selimthegrim 11y ago
  http://www.cringely.com/2015/10/21/why-yahoo-is-worth-less-than-nothing/ http://www.cringely.com/2015/10/21/why-yahoo-is-worth-less-t...

ChuckMcM 11y ago

Certainly the end of the beginning. Yahoo!, one of perhaps a handful of companies, was the first "Internet"[1]. Those companies blazed an interesting trail and brought the mainstream population of the US into the "online" world. That they emerged across the chasm that was the dot.com crash, was a testament to the amount of momentum they carried with them. I have a tremendous amount of respect for them, but even with Marissa at the helm the biggest challenge they have not seemed able to overcome, was to tranform into something more 'web 3.0' ish. I would not be surprised in the slightest if Microsoft spun out Bing as a subsidiary, and absorbed the assets and IP of Yahoo! into their own search centered business with a portal attached. By resizing that combined business to be profitable based on the search and ad revenue I expect the case could be made for that as a long lived entity that remains when Google implodes. And having an already separate (or separable) would allow Microsoft to step away to avoid anti-trust concerns while keeping a partial interest to capture the value appreciation. [1] the 0th Internet was what emerged right after HTTP started propagating, GNN, bookmarks etc.

peter303 11y ago
MicroSoft made a major bid for Yahoo several years ago, but Yang want more money. MicroSoft hoped there would be synergy between combining MSN and Yahoo.
finnh 11y ago
When/why do you expect Google to implode?
- ChuckMcM 11y ago
  Google has been losing margin (hence profitability) in its search advertising business that powers everything it does fairly rapidly over the last 6 years. They have kept revenue/cash flow going/improving over that same period by putting more and more ads on their properties, dumping things which aren't making money, and trying really hard to push many of the moonshot projects into profitability. During the same 6 years Microsoft has been reporting growing margins on its search advertising business and Bing became profitable for the first time not too long ago. The issue for Google is that while their search is good, Microsoft has crossed over into the "good enough" space (for the customers, advertisers) and the product (people using the service) are less and less likely to force switch the search engine default to Google. Worse, the back stop efforts that Google has been doing to protect revenue growth have caused many long time users to become dissatisfied with their user experience. Google's portal portfolio (News, Finance, G+, Pictures, and Blogger) and cloud offering (GCE) have not kept up with other offerings in the space they are losing share. All of that summarizes to "web services are becoming commodities" and while profitable (as Bing has demonstrated) it's not going to continue to be profitable enough for Google to do that and any of the other projects that 90% of the other employees work on. So first Google will start reporting down quarters because no matter how many ads they cram on a page it doesn't improve their RPM, then start cutting projects internally left and right to cut costs, and then they start cutting more of the benefits, and then they start downsizing groups to stay within the 'profitable' envelope, and like a main sequence star that has run out of hydrogen to burn, the collapse to white dwarf has begun. What Alphabet does at that point will be interesting, but their margins on the G business will only be sufficient to support the G business and not anything else. If they aren't making any money elsewhere then poof. So when? Can't say, really it depends on them being able to pull out into a sustainable business model on the lower margins of commoditized search. Google seems to understand the threat to the business (given their moves, like Alphabet, changing CFOs Etc.). And they are really smart so if there is a way out they may be able to find it, and they have enough cash to "coast" for a long time (look how long Yahoo has coasted right?) But a lot of these things end up being additive, the shine goes off of working there, a lot of solid people leave and then you can lose the ability to change fast enough to avoid your fate. Companies that pull it off (re-inventing themselves) are much rarer than companies that auger into the ground.

deleted 11y ago

[deleted]

ArtDev 11y ago

Yahoo bought my favorite task manager, and killed it. Yahoo bought Flickr, and has been slowly killing it for years. Yahoo bought delicious.com, said they were going to kill it, but later sold it. Most of the users that left never came back. Has Yahoo done anything worthwhile in the last 15 years besides disrupt innovation in a bad way?

sirkneeland 11y ago
While we're at it, they also bought and ruined my second favorite Android launcher, Aviate!
ghaff 11y ago
In the case of delicious, in all fairness, the whole tagging/folksonomies thing ended up being pretty much a passing fad. (Though I do use pinboard myself and find it useful.)

intrasight 11y ago

Used Yahoo paid email for several years in the 00s. I've not used Yahoo for anything else. Never did understand what is their business model.

profeta 11y ago
remember how you used everything form yahoo when you were first online? well, there are billions of people just getting their first online experience.
- deleted 11y ago
  [deleted]

craigasketch 11y ago

Is this a harbinger for darker times to come? Or is it simply Yahoo's time finally? I think there is still value in Yahoo it's just expectations vs market reality to me are at odds. I don't know what I'll set my grandma's homepage to now.

barretts 11y ago

Any reason I shouldn't see this as a complicated tax dodge? Simply more multinational pilfering from public coffers? Why shouldn't the Alibaba capital gains be taxed?

fredkbloggs 11y ago
I assume your question was intended as rhetorical, but there's an actual answer to it: because when the owner of the Yahoo stock (or a hypothetical Yahoo holding company for Alibaba stock) sells his shares, he will pay tax on his gain from that holding. To turn the question on its head: why should some capital gains be taxed twice and others once (or in rare cases, three times or not at all)?

pitt1980 11y ago

what multiple of its earnings was Yahoo trading at at the height of its glory? given that we now know the postscript (or at least much of it) did that multiple make any sense?

ghaff 11y ago
Undefined. Yahoo was one of the first big Internet companies in the late 1990s to make you shake your head and go "This must be a bubble." They had some ridiculous valuation at a time when they were losing money so P/E doesn't mean anything.

epmatsw 11y ago

I wonder what will happen to their fantasy football product. It's wayyyy better than their competitors

rchaud 11y ago
It is odd that Yahoo's stake of the fantasy sports market constantly goes unmentioned while daily fantasy startups like Draft Kings is currently bathing in VC cash and media coverage.
- epmatsw 11y ago
  You know, that is strange. Yahoo has a much much larger share of the traditional fantasy market, as well as a daily fantasy product. Not sure how the money aspect of it compares with FanDuel or DraftKings, but you would think they'd be able to leverage that in some way. Maybe a smaller spinoff company would be more likely to do something with that
  - rchaud 11y ago
    That's the point I was trying to make. Yahoo has first mover advantage in having their own infrastructure for calculating scores and player statistics, not to mention a large base of users. Surely their fantasy sports products would be of value to companies looking to get a piece of the online sports gambling industry?
- jonknee 11y ago
  > daily fantasy startups like Draft Kings is currently bathing in VC cash and media coverage. They're currently bathing in legal battles and will probably be out of business in very short order. It's a liability for Yahoo, not an asset to brag about.
  - rchaud 11y ago
    That depends. I thought the same thing would happen to Uber, but they've used their rapid growth and VC money to fund lobbying efforts to change the laws around taxi regulation. As I understand it, these FF startups are attempting to exploit similar loopholes in Internet gambling laws as a short-term fix while they lobby to change the law in their favor.

jonknee 11y ago

Marissa Mayer and Maynard Webb were on CNBC this morning talking about the spin: Part 1: https://amp.twimg.com/v/76b8a5e2-9a6c-40c3-9c1b-e2c8bcf91159 https://amp.twimg.com/v/76b8a5e2-9a6c-40c3-9c1b-e2c8bcf91159 Part 2: https://amp.twimg.com/v/ce42d263-7b9c-4716-8d06-b320ed243606 https://amp.twimg.com/v/ce42d263-7b9c-4716-8d06-b320ed243606 Mayer seems completely bored by the whole thing and keeps passing stuff off to Webb as "board level consideration". Doesn't make me excited for Yahoo whatsoever.

profeta 11y ago
OTOH if the CEO is excited about a tax shenanigan i will not be excited by the company.
- jonknee 11y ago
  Yahoo's stake in Alibaba is by far the most valuable part of Yahoo. The "tax shenanigan" itself is worth more than Yahoo's core business! If she can't get excited about the majority of shareholder value she needs to step down ASAP.
  - profeta 11y ago
    because the CEO can do so much more than an accountant? do you also fire your doctors because they don't pray? the CEO should be rallying troops and making deals. well, at least that is the excuse for their obscene salaries and bonuses.
    - jonknee 11y ago
      > the CEO should be rallying troops and making deals. well, at least that is the excuse for their obscene salaries and bonuses. She looked like she was asleep. Wasn't rallying anyone or making any deals. Did you watch the interview? She was talking about the most important thing she has ever done as a CEO and couldn't care less. She has checked out.

ddlatham 11y ago

What's the difference aside from the tax liability? Either way you wind up with two companies. One with the Alibaba shares, and the other with everything else.

jackgavigan 11y ago
There is no difference aside from the potential tax liability but the tax liability is potentially huge. We're talking over $9bn. Matt Levine wrote a good piece on this a week ago: http://www.bloombergview.com/articles/2015-12-02/yahoo-is-looking-for-a-new-way-around-alibaba-taxes http://www.bloombergview.com/articles/2015-12-02/yahoo-is-lo...
- ddlatham 11y ago
  Totally agree that any shift in the tax liability is significant. But people seem to be discussing many other consequences now: Does this mean the end of Yahoo? Is it being acquired? Are they shutting down Flickr or Tumblr? Why would this change make any difference to those questions?
  - jackgavigan 11y ago
    > Why would this change make any difference to those questions? I don't think it does. I think the difference is that Starboard suggested that Yahoo sell its core business - http://www.wsj.com/articles/starboard-urges-yahoo-to-drop-alibaba-spinoff-plan-1447905535 http://www.wsj.com/articles/starboard-urges-yahoo-to-drop-al... - and Verizon's CFO suggested that they might be interested in buying Yahoo Core if it was put up for sale - http://www.bloomberg.com/news/articles/2015-12-07/verizon-would-explore-yahoo-deal-if-it-made-sense-cfo-says http://www.bloomberg.com/news/articles/2015-12-07/verizon-wo...
    - ddlatham 11y ago
      Right, it sounds like you agree with me. But most of the rest of the comments on this article suggest this is a significantly meaningful change.

jackgavigan 11y ago

I thought Yahoo's stock price would rise on this news (because it removes the uncertainty that was overshadowing the original Aabaco spin-off plan) but, despite a brief opening spike, the stock is down on yesterday's close. On the conference call this morning, the management team sounded really downbeat. I expected them to sound positive and optimistic, talking about unlocking shareholder value and focusing on Yahoo Core but they sounded like somebody had died. As of this moment, the market value of Yahoo's stakes in Alibaba and Yahoo Japan are $32.5bn and $8.67bn respectively, while Yahoo itself has a market cap of $32.37bn. To quote Matt Levine, "the whole point of Yahoo as a company right now is to not pay taxes on Alibaba. [...] If there was a way to avoid paying taxes on the Alibaba shares that involved burning all of Yahoo's actual businesses to the ground, Yahoo should do that all day long, and then do it again the next day. It would still add shareholder value." "And the market, right now, is valuing Yahoo as though it will fail in that mission, which is its only mission." Source: http://www.bloombergview.com/articles/2015-12-02/yahoo-is-looking-for-a-new-way-around-alibaba-taxes http://www.bloombergview.com/articles/2015-12-02/yahoo-is-lo...

dothis 11y ago

Do you guys think our emails on Yahoo mail are safe after this? I will backup mine as soon as I find the time to do so. Yahoo has a terrible track record regarding emails. I already lost one due to inactivity. They gave it to somebody else. That somebody probably has access to several of my accounts now. On websites where I used my Yahoo address and then just forgot about it.

mgalka 11y ago

What I want to know is, how has Yahoo lasted so long? Google has beaten them at search, maps, email, and news. And their homepages is still confusing web 1.0 jumbled mess. What do people still use Yahoo for anyway?

spikels 11y ago
Yahoo's survival is a legacy of it's huge success in the late 1990s when it was the most successful company on the Internet. You are likely young and did not experience Yahoo's almost Google like dominance at the time. First, while Yahoo's core "portal" business model was losing market share to search (i.e. Google) the overall market for online advertising was growing rapidly which masked it's weakness for many years. Second, it invested it's huge early profits into the growing Internet both in the US and internationally. Most of these investments were failures but two were HUGE successes: Alibaba and Yahoo Japan. Yes, Yahoo is a declining platform but still has millions of users for all of the things you list. Like it predecessor AOL there is a very long tail as people are creatures of habit and don't like to change email or start page, etc.
- mgalka 11y ago
  I am old enough to have a yahoo.com email, which I suppose proves your point.

3pt14159 11y ago

So I don't understand one simple thing: The stock is up 120% since Mayer took over. Even adjusting for compounding interest over 3.43 years, this is like 25+% yearly growth. So the core business is crapping out? So what? Why is everyone dumping on Mayer? I don't even think I could fix the core Yahoo business. They have to pay a 50% premium for developers just because it's Yahoo and their core audience is the technically illiterate; a group that is fairly difficult to monetize.

skylan_q 11y ago
What's the beta on that stock? Look at it in comparison to other tech stocks. Most of Yahoo's recent rise is explained by the rise in all tech stocks over the last few years.
1024core 11y ago
> The stock is up 120% since Mayer took over. All of that is because of $BABA. If you add up the current value of $BABA and Yahoo Japan shares that Yahoo holds, it's more than the market cap of Yahoo; which means, the $4B/year revenue business that is rest of Yahoo is valued negatively by the market. SMH....
MadManE 11y ago
I would venture that it has something to do with Alibaba and not really a lot to do with Yahoo. Yes, it's a good financial call, but it puts all of the control in someone else's hands.
shas3 11y ago
Corporate governance is a lot about perceptions. Even if you set aside the fact that most of that growth comes from Yahoo's stake in Alibaba, you still have the question about Yahoo's future and vision. If there is a perception that their future is shaky, that matters more than if things are likely to turn out badly. Should add, IANAL aka, I am no analyst
joeblau 11y ago
The stock is up because overall, Yahoo as an overall business is doing great. The problem is that the best financial parts of Yahoo are its investments. If Yahoo was solely an investment company, it would have a great record. Yahoo, however, has the core business which is what most people interact with on a daily basis that loses money. I joked with my friend at the beginning of 2015 that Yahoo performs betters as a VC than as an internet company.

sremani 11y ago

Ms.Mayer took a very difficult job. There is no sense in feeling for her, she knew what she was getting into and she was paid highly as if she already accomplished a turn around. Every thing said and done, Ms.Mayer will have $400 Million, even if Yahoo as we know is Kaput. It is a demonstration that C-level execs do not have skin in the game any more, they are paid like they already accomplished the task they have set to.

crudbug 11y ago

Zuck - If you are here .. Buy Yahoo for Max, Trust me, you will thank me later. :)

kzhahou 11y ago

What's this mean for a company like Polyvore, acquired a couple months ago?

mmanfrin 11y ago

Wait, so since they can't spin off the Alibaba stake tax free, they're going to spin off Yahoo (and pay taxes on that lesser-valued spin off)? Shareholders would then own 'YHOO' which are basically BABA pass-through stocks, and whatever other company Yahoo becomes?

poofyleek 11y ago

Yahoo Core Business valuation is at this point low enough that any one of the Unicorns, e.g. Uber, Airbnb,... could easily afford it. Tumblr could have raised more money to become a bigger Unicorn and could have acquired Yahoo. Absurdity is reality.

ShardPhoenix 11y ago

"The decision not to sell the Alibaba stake, which was reported on Tuesday, was driven by “the market’s perception of tax risk” associated with the Alibaba plan" It's unfortunate that the tax code is so complex that ambiguous "tax risk" is a thing.