Despite Takeover Turmoil, Yahoo Not Rolling Over & Playing Dead
A curious thing is happening: Yahoo seems to be executing in the midst of the chaos of uncertainty surrounding its future. Speaking at an IAB event yesterday, Yahoo CEO Jerry Yang said the Microsoft takeover bid has been “a galvanizing event for everyone at Yahoo.”
Indeed, in the past three or so weeks since the initial Microsoft bid, Yahoo has:
- Launched Yahoo Buzz
- Introduced Yahoo Search Monkey
- Acquired Maven Networks
- Introduced Yahoo Live
- Previewed an impressive new unified advertising platform (Apex)
- Upgraded and expanded Yahoo Video (video is also coming to Flickr)
- Introduced an open-source infrastructure (Hadoop) for its search index
The company also laid off 1,000 employees.
Yahoo President Sue Decker said at the same IAB event that the Microsoft bid “accelerated conversations that were out there,” in reference to News Corp., AOL, and Google partnership/merger conversations.
Meanwhile, last Friday Microsoft’s Kevin Johnson again made the case for a Micro-Hoo combination and sought to allay concerns about layoffs and duplication at the combined company. But some shareholders and others are starting to question whether Microsoft should continue to pursue Yahoo. Microsoft’s shares have lost close to 15 percent since the bid was announced.
On the other side, Yahoo now faces multiple suits from shareholders for not accepting the Microsoft bid and for proposing a plan to offer “golden parachutes” for Yahoo employees, a kind of “poison pill” for Microsoft in the event of a takeover.
Pundits and others have argued that Yang has not had sufficient resolve and took too long to execute on the professed strategy of making Yahoo the internet’s “consumer starting point” as well as an open platform. However, the company seems to have found resolve and focus amid the crisis. Indeed, it often takes crisis to motivate action.
Before the crisis eases and things calm down, however, the intensity of the drama will only increase. Microsoft’s now hostile takeover effort and proxy fight requires it to install a new board, which is sympathetic to the bid. It will accordingly nominate a new slate of potential directors on March 13. It needs the backing of a majority of shareholders to elect the board.
I’m guessing that a range of institutional shareholders has informally told Microsoft they will support the proxy fight or Microsoft wouldn’t have gone down that path. I’m speculating, however.
It’s terribly ironic that it took Microsoft’s bid to, in effect, wake Yahoo up. And while nobody can predict the outcome with certainty, which has grown more hazy in recent weeks, Yahoo for the time being seems to be back on course.
(Some images used under license from Shutterstock.com.)
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