4 ms·

Success would have been growing revenues, instead of watching them decline. Success would have been at least one really successful mobile app. Success would h

by scholia 10y ago

Success would have been growing revenues, instead of watching them decline. Success would have been at least one really successful mobile app. Success would have been not selling Yahoo....

stinkytaco 10y ago
Yahoo is a publicly traded company. Selling Yahoo went very well for the shareholders and the first rule for any publicly traded company is to maximize shareholder value. I think it's very clear that the goal when she was hired was to sell the company and get the shareholder's some payout. Considering where the company was when she came in, I'd say she did an admirable job at this. You might say that's not success, but I think the (shareholder elected) board had the company on that trajectory before she was hired. She came in to finish the job.
- excitom 10y ago
  > the first rule for any publicly traded company is to maximize shareholder value. It always bothers me to see this, as I feel it is the reason many companies decline. The first rule should be "make the customers happy" and the second rule should be "keep the employees happy" since happy employees help implement the first rule. If rule one and two are achieved then as a side effect shareholder value is maximized.
  - iopq 10y ago
    >The first rule should be "make the customers happy" and the second rule should be "keep the employees happy" if you burn through your cash reserves doing those things and now you don't have any money, that doesn't do anything for you since you burned all your cash - even if employees and customers are happy the first rule should be "make money", the second rule should be "spend less money than you make" if those two are achieved, THEN shareholder value is maximized
    - pfarnsworth 10y ago
      Not true. Sometimes shareholders want metrics like Return on Equity, which forces the hand of management to sell profitable parts of the business... but not profitable enough. That's the insanity of trying to maximize shareholder value.
      - twblalock 10y ago
        That's only insane if you assume the success of the business is the goal, rather than the success of the shareholders.
        pfarnsworth 10y ago
        Success of the business and success of the shareholders is not a zero-sum game. You can usually have both. What is insane is sacrificing the success of the business for the success of shareholders. That affects employees, and you end up getting situations where entire towns get fucked because the profitable-but-not-profitable-factory gets shut down because of some obscure metric.
        stinkytaco 10y ago
        I think a culture has developed -- in the United States specifically -- where we expect companies to act according to some undefined ethical principle. We're upset when they don't pay taxes, close factories, pollute the environment or whatever. The problem is these principles are always moving goalposts and more often than not, immeasurable. A business exists to make money. That is a concrete and measurable goal and thus one that the organization is made to pursue. If a business it not in it to make money, it's something else: perhaps a non-profit, an NGO, a union, a cooperative, etc. There are places for organizations that don't exist to make money, but publicly traded exchanges are not it. It's really the responsibility of communities to plan, governments to regulate and enforce and people to rationally choose the best for themselves and their community. As pointed out above, there are a variety of ways to do this, it's a matter of choosing the right ones.
  - overcast 10y ago
    Unfortunately that is not a reality. Once you go public, the entire focus of a company is paying out to shareholders. Everything else is secondary.
  - twblalock 10y ago
    If companies operated like that, people would not invest in them. Why would you invest in a company that does not put your share growth as a priority, when others will? Besides, the shareholders own the company. Why shouldn't a company prioritize those who own it? The shareholders take on risk by providing capital to the company, and they deserve to be compensated for that risk.
  - eagsalazar2 10y ago
    I think you are confusing strategic principles with actual goals. Unless you are essentially an NGO and your investors are donating money as philanthropists, the #1 goal of a public company is never anything but make money for the shareholders. The goals of the investors and owners are the goals of the company. Focusing on customer and employee happiness are just means to that end.
- scholia 10y ago
  > Yahoo is a publicly traded company. Selling Yahoo went very well for the shareholders and the first rule for any publicly traded company is to maximize shareholder value. No, it went badly. If she'd been able to increase sales, and if she'd launched one or more successful apps, Yahoo would have been more valuable. In fact, they might even have sold Yahoo for more before she spent loads of money buying lots of companies and writing down their value. > I think it's very clear that the goal when she was hired was to sell the company and get the shareholder's some payout. Don't think so. You'd be welcome to provide some evidence for that claim, but the publicly stated aim at the time was to turn Yahoo around. She failed badly at that. Yahoo: The challenges facing new boss Marissa Mayer By Matthew Wall Business reporter, BBC News 17 July 2012 http://www.bbc.co.uk/news/business-18867477 http://www.bbc.co.uk/news/business-18867477
  - stinkytaco 10y ago
    The stock price on July 1, 2012 was 15.84. Today it's 38.30. So over the last 4 years she's more than doubled the stock price. And her compensation is tied to that stock price, which to me points to a "sell me" strategy by the Yahoo board. Add to that the fact that revenue hasn't even close to doubled in that time (though net income has been fairly healthy due to some cost cutting), it seems to that the market has been anticipating this acquisition. I don't think anyone has been buying Yahoo stock expecting a turnaround. Considering the trajectory of Yahoo since 2004 or so, I'd say that's as good an outcome as shareholders could expect.
    - scholia 10y ago
      True, but the rise had nothing to do with Mayer or the core Yahoo. It was the Alibaba stock in particular that drove the share price. Which is why if you removed the value of Yahoo's shareholdings, the core Yahoo (nominally, at least) had a negative value. > the market has been anticipating this acquisition Yes, it has, but Mayer fought against that until she had no choice. She lost that battle when activist investor Starboard Value -- which had been pushing for the break-up -- got its CEO named to Yahoo’s board of directors. See http://www.ibtimes.com/yahoo-yhoo-shareholders-meeting-2016-endgame-marissa-mayer-2388404 http://www.ibtimes.com/yahoo-yhoo-shareholders-meeting-2016-... Starboard has been pushing the break up for a couple of years. It wrote several interesting letters, like this from January 2015: http://fortune.com/2015/01/08/starboards-latest-letter-to-yahoo/ http://fortune.com/2015/01/08/starboards-latest-letter-to-ya... You'll see that Starboard had already been pushing the break up of Yahoo and the sale to AOL's parent. Further, we continue to believe that Yahoo must significantly reduce costs to improve profitability in its core business and should be considering a combination with AOL. A combination with AOL, structured properly, could accomplish all of these goals by allowing for: (i) a tax-efficient separation of the non-core minority equity investments; (ii) tremendous cost synergies of between $1 billion and $1.5 billion; and (iii) a strong growth platform given AOL’s progress in mobile and video advertising. The investors were scared because Mayer had, in effect, a bottomless supply of cash (in Yahoo Japan and Alibaba) and she had already wasted $2 billion. They wanted the break-up before she could splash out on something bigger and even more useless than Tumblr. That's one of the reasons why she was such a failure.
jwommack 10y ago
Yahoo's fantasy sports app is pretty successful. It's about as installed as ESPNs and they were third in DFS (though far behind the first two). They actually just did a major redesign to it that made the DFS stuff more prominent. https://medium.com/@jonathanjoseph/speculating-on-the-value-of-an-independent-yahoo-fantasy-sports-a8d4bfb409aa#.vwsvr24s6 https://medium.com/@jonathanjoseph/speculating-on-the-value-...
TheCoelacanth 10y ago
Conceivably, you could consider it a phenomenal success to sell something for $5 billion that the stock market was once valuing at less than $0.
- scholia 10y ago
  It's a little more complicated than that, but see https://docs.google.com/spreadsheets/d/1UHMfzlmE7HXY_ph9BN686gOCiji1bQ-rsbnjtKD3oho/edit?pref=2&pli=1#gid=1735568199 https://docs.google.com/spreadsheets/d/1UHMfzlmE7HXY_ph9BN68...

by scholia 10y ago

Success would have been growing revenues, instead of watching them decline. Success would have been at least one really successful mobile app. Success would have been not selling Yahoo....

stinkytaco 10y ago

Yahoo is a publicly traded company. Selling Yahoo went very well for the shareholders and the first rule for any publicly traded company is to maximize shareholder value. I think it's very clear that the goal when she was hired was to sell the company and get the shareholder's some payout. Considering where the company was when she came in, I'd say she did an admirable job at this. You might say that's not success, but I think the (shareholder elected) board had the company on that trajectory before she was hired. She came in to finish the job.

excitom 10y ago
> the first rule for any publicly traded company is to maximize shareholder value. It always bothers me to see this, as I feel it is the reason many companies decline. The first rule should be "make the customers happy" and the second rule should be "keep the employees happy" since happy employees help implement the first rule. If rule one and two are achieved then as a side effect shareholder value is maximized.
- iopq 10y ago
  >The first rule should be "make the customers happy" and the second rule should be "keep the employees happy" if you burn through your cash reserves doing those things and now you don't have any money, that doesn't do anything for you since you burned all your cash - even if employees and customers are happy the first rule should be "make money", the second rule should be "spend less money than you make" if those two are achieved, THEN shareholder value is maximized
  - pfarnsworth 10y ago
    Not true. Sometimes shareholders want metrics like Return on Equity, which forces the hand of management to sell profitable parts of the business... but not profitable enough. That's the insanity of trying to maximize shareholder value.
    - twblalock 10y ago
      That's only insane if you assume the success of the business is the goal, rather than the success of the shareholders.
      - pfarnsworth 10y ago
        Success of the business and success of the shareholders is not a zero-sum game. You can usually have both. What is insane is sacrificing the success of the business for the success of shareholders. That affects employees, and you end up getting situations where entire towns get fucked because the profitable-but-not-profitable-factory gets shut down because of some obscure metric.
        stinkytaco 10y ago
        I think a culture has developed -- in the United States specifically -- where we expect companies to act according to some undefined ethical principle. We're upset when they don't pay taxes, close factories, pollute the environment or whatever. The problem is these principles are always moving goalposts and more often than not, immeasurable. A business exists to make money. That is a concrete and measurable goal and thus one that the organization is made to pursue. If a business it not in it to make money, it's something else: perhaps a non-profit, an NGO, a union, a cooperative, etc. There are places for organizations that don't exist to make money, but publicly traded exchanges are not it. It's really the responsibility of communities to plan, governments to regulate and enforce and people to rationally choose the best for themselves and their community. As pointed out above, there are a variety of ways to do this, it's a matter of choosing the right ones.
- overcast 10y ago
  Unfortunately that is not a reality. Once you go public, the entire focus of a company is paying out to shareholders. Everything else is secondary.
- twblalock 10y ago
  If companies operated like that, people would not invest in them. Why would you invest in a company that does not put your share growth as a priority, when others will? Besides, the shareholders own the company. Why shouldn't a company prioritize those who own it? The shareholders take on risk by providing capital to the company, and they deserve to be compensated for that risk.
- eagsalazar2 10y ago
  I think you are confusing strategic principles with actual goals. Unless you are essentially an NGO and your investors are donating money as philanthropists, the #1 goal of a public company is never anything but make money for the shareholders. The goals of the investors and owners are the goals of the company. Focusing on customer and employee happiness are just means to that end.
scholia 10y ago
> Yahoo is a publicly traded company. Selling Yahoo went very well for the shareholders and the first rule for any publicly traded company is to maximize shareholder value. No, it went badly. If she'd been able to increase sales, and if she'd launched one or more successful apps, Yahoo would have been more valuable. In fact, they might even have sold Yahoo for more before she spent loads of money buying lots of companies and writing down their value. > I think it's very clear that the goal when she was hired was to sell the company and get the shareholder's some payout. Don't think so. You'd be welcome to provide some evidence for that claim, but the publicly stated aim at the time was to turn Yahoo around. She failed badly at that. Yahoo: The challenges facing new boss Marissa Mayer By Matthew Wall Business reporter, BBC News 17 July 2012 http://www.bbc.co.uk/news/business-18867477 http://www.bbc.co.uk/news/business-18867477
- stinkytaco 10y ago
  The stock price on July 1, 2012 was 15.84. Today it's 38.30. So over the last 4 years she's more than doubled the stock price. And her compensation is tied to that stock price, which to me points to a "sell me" strategy by the Yahoo board. Add to that the fact that revenue hasn't even close to doubled in that time (though net income has been fairly healthy due to some cost cutting), it seems to that the market has been anticipating this acquisition. I don't think anyone has been buying Yahoo stock expecting a turnaround. Considering the trajectory of Yahoo since 2004 or so, I'd say that's as good an outcome as shareholders could expect.
  - scholia 10y ago
    True, but the rise had nothing to do with Mayer or the core Yahoo. It was the Alibaba stock in particular that drove the share price. Which is why if you removed the value of Yahoo's shareholdings, the core Yahoo (nominally, at least) had a negative value. > the market has been anticipating this acquisition Yes, it has, but Mayer fought against that until she had no choice. She lost that battle when activist investor Starboard Value -- which had been pushing for the break-up -- got its CEO named to Yahoo’s board of directors. See http://www.ibtimes.com/yahoo-yhoo-shareholders-meeting-2016-endgame-marissa-mayer-2388404 http://www.ibtimes.com/yahoo-yhoo-shareholders-meeting-2016-... Starboard has been pushing the break up for a couple of years. It wrote several interesting letters, like this from January 2015: http://fortune.com/2015/01/08/starboards-latest-letter-to-yahoo/ http://fortune.com/2015/01/08/starboards-latest-letter-to-ya... You'll see that Starboard had already been pushing the break up of Yahoo and the sale to AOL's parent. Further, we continue to believe that Yahoo must significantly reduce costs to improve profitability in its core business and should be considering a combination with AOL. A combination with AOL, structured properly, could accomplish all of these goals by allowing for: (i) a tax-efficient separation of the non-core minority equity investments; (ii) tremendous cost synergies of between $1 billion and $1.5 billion; and (iii) a strong growth platform given AOL’s progress in mobile and video advertising. The investors were scared because Mayer had, in effect, a bottomless supply of cash (in Yahoo Japan and Alibaba) and she had already wasted $2 billion. They wanted the break-up before she could splash out on something bigger and even more useless than Tumblr. That's one of the reasons why she was such a failure.

jwommack 10y ago

Yahoo's fantasy sports app is pretty successful. It's about as installed as ESPNs and they were third in DFS (though far behind the first two). They actually just did a major redesign to it that made the DFS stuff more prominent. https://medium.com/@jonathanjoseph/speculating-on-the-value-of-an-independent-yahoo-fantasy-sports-a8d4bfb409aa#.vwsvr24s6 https://medium.com/@jonathanjoseph/speculating-on-the-value-...

TheCoelacanth 10y ago

Conceivably, you could consider it a phenomenal success to sell something for $5 billion that the stock market was once valuing at less than $0.

scholia 10y ago
It's a little more complicated than that, but see https://docs.google.com/spreadsheets/d/1UHMfzlmE7HXY_ph9BN686gOCiji1bQ-rsbnjtKD3oho/edit?pref=2&pli=1#gid=1735568199 https://docs.google.com/spreadsheets/d/1UHMfzlmE7HXY_ph9BN68...