Why hate Microsoft? Now we have Facebook for that.
Technology and Business
Yahoo’s troubles are nothing new. So two days ago their board fired Carol Bartz, the potty-mouthed former head of Autodesk, after her stint of less than three years as Yahoo’s CEO. At the time she replaced at the helm Jerry Yang, Yahoo’s cofounder and the man singularly responsible for rejecting in 2008 Microsoft’s buyout bid that amounted to more than twice what the iconic Silicon Valley company is worth now.
Carol’s comment about Yahoo’s decision was, not surprisingly, F-word foul. The stock market’s gleeful reaction was a two-point pop on the floundering stock. But Yahoo is not going anywhere anytime soon. They are making good money (both profit and cash), to the tune of almost $200 million last quarter, a very robust 20% net profit margin that would be the envy in any industry outside the heady Internet domain.
And Yahoo is still sitting on $2 billion, after spending many more billions on buying back their stock over the last five years. Their trouble is declining revenue (topline sales) over past two years, compared with Google’s current 30%+ revenue growth. So, Wall Street values Yahoo at $18 billion, to Google’s $170 billion, albeit the search giant having seven times the sales.
Some people claim spotting a decade ago Yahoo’s misguided desire to be a media company rather than a technology one. Facebook passed Yahoo in popularity last year, and they are known for cultivating a hacker culture. So, what will Roy Bostock, Yahoo’s Chairman of the Board do now? His credentials include sitting on boards of Delta and Northwest Airlines, neither a stellar performer. Mr. Bostock saw them through a merger in 2008, despite a consumer lawsuit and close regulatory scrutiny. But, an English major in college that went on to a Harvard MBA, how much does he know about highest of Internet technology?
Yahoo made many missteps over last several years, like hiring a CEO that cannot tell you what the company does exactly or firing a bunch of people right before Christmas. Their revenues and profitability have been declining during last several years and quarter-to-quarter. We mentioned earlier their inapt handling of Delicious.
Looking back it’s hardly surprising, as in years past Yahoo ran into the ground a number of major Internet brands, like Geocities and Altavista. And they had cancelled many internal offerings in popular and promising areas, like Yahoo! Bookmarks, Picks, and Buzz, plus Yahoo Featured Listings. Location-based services (LBS) is very hot these days, and meanwhile Yahoo dumps Placemaker and their Traffic APIs. This is beyond not keeping-up with competition, but a pattern of outright failure.
P.S. YouTube founders took Delicious off Yahoo’s hands on April 27th and are now building a new brand around it.
P.P.S. Another Yahoo casualty, MyBlogLog, was discontinued effective May 24.
Twitter has become not only the backchannel but the main channel of public exchange in the technology world. Yet, a tweet is such a personal remark, easily made off the cuff, on the spur of the moment. And then it stays around, in serverland, for eternity.
So, Yahoo bought the pioneering social bookmarking site Delicious in 2005. Last December they decided to can it, or using corporatespeak, to ‘sunset’ it. Smart people commented on many errors of Yahoo’s ways, but what I find curious is the exchange of tweets that took place. Andy Baio is the founder of upcoming.org that was also bought by Yahoo in 2005 and then allowed to wither. When he heard about the plans for Delicious in an internal Yahoo employee meeting he tweeted about it.
Blake Irving, originally a surfer dude from San Diego, was hired in May 2010 as Chief Product Officer (no kidding), to report directly to Yahoo’s newish CEO, Carol Bartz. He got mad about the tweet leak and tweeted that the person will be fired. This may be an attitude he picked-up during his fifteen years at Microsoft, but blasting like that is not PC for a corporate functionary. An ending of sorts came when Kevin Rose, founder of a social news site Digg, tweeted that he’d like to buy Delicious and turn into something great.
In the land of Google, Nokia’s new chief Stephen Elop was hired from Microsoft in September 2010 (is there a theme developing here?) He decided in favor of Windows for Nokia’s new OS, rather than Android. The information was leaked from both companies, as a memo by Nokia and as a tweet by a Google VP Vic Gundotra (oh, no, he was at Microsoft through 2006).
Meanwhile, in the real world, Twitter the company was the only one to push back on Government’s order for release of data from Wikileaks suspects. And Alexander Macgillivray, Twitter’s lawyer, tweeted about Government’s analysis on the matter.