Wednesday, February 07, 2007

What's the Strategy Inside Yahoo!?

Time Magazine's Jeremy Caplan (and Jeff Ressner) recently profiled the latest news on Yahoo! with the full article here.

For it, Yahoo! was complicit in allowing Timothy Archibald access for some artistic signs within the Yahoo! campus (of the basketball court and sign directing the Yahooligans to the cafeteria). It's clear that there are other points Yahoo! wanted to get across in the article.

What I find discouraging as a Yahoo! shareholder are intimations in the article that Yahoo! could join forces/be bought later this year with Microsoft, AOL, or Bertelsmann. This possibility is attributed to "analysts," including blogger and commentator Paul Kedrosky and is reiterated later in the full article, and not directly to Yahoo! management. Yet, it doesn't seem to be an accident that it's there.
Of course, there's nothing wrong with increased shareholder value and one way for this to happen would be for one of these companies (or any other) to come in and pay a 40% premium to take over the company. Since proposing a "Plan B" for Yahoo! a month ago, my primary goal was to raise shareholder value for all Yahoo! shareholders.
(I'm pleased that, since the activism began --exactly one month ago today -- Yahoo!'s stock price is up 5.8% compared to the NASDAQ being up only 1.53% and Google being down 3.22%. This has more to do with Panama being rolled out sooner than anticipated than our activism itself, but it's hard to argue that our shining a light on the areas where the company can unlock value has attracted interest in how undervalued it is, given its stable of assets.)
Yet, I do have a big problem with the fact that Yahoo! (and therefore, Terry, and ultimately the Board) has failed to articulate a clear strategy about how the company will be dominant for years to come independently. Better monetizing search is not a company strategy, it's a tactic. Improving a lead in graphical ads is not a strategy, it's a tactic. Doing lots of ankle-biter acquisitions is not a strategy (although I like and use MyBlogLog, Flickr, haven't tried Bix yet, but I think Terry mentioned during the last call that it's a site that does 'ka-ro-kee'). Getting snapped up by Microsoft and assimilated into MSN is not a strategy.
I would like to hear one. Jeff Weiner has proudly stated that Yahoo! now has a mission: "Connecting people with their passions, communities and the world's knowledge." Stewart Butterfield has given this his seal of approval, because "A year and a half ago there wasn't a satisfying articulation of what the mission of the company was." I'm still waiting for the articulation for the strategy. The company, investors, and employees need one and deserve one.
Happy One-Month Birthday, 'Plan B.'

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