In June of 2007, I wrote this post concerning Terry Semel's departure as Yahoo CEO. At the time, co-founder Jerry Yang assumed Semel's post. I wrote, in that post,
"To me, however, the most likely epitaph for Yahoo is that it remained the used car of the online world for too long, wasting its early, premier position in so many nascent areas. Now, I believe Schumpeterian dynamics have overtaken it, rendering it a largely has-been collection of concepts, technologies and online information offerings. If they haven't managed to collect revenues for most of this by now, thus setting expectations of free services, what makes you think someone else can do better without losing visitors, resulting in continued problems achieving profitable growth and, with it, consistently superior total returns?"
The nearby, two-year price chart of Yahoo's equity, compared with the S&P500 Index for the same timeframe, illustrates how destructive Yang's temporary reign has been for the firm's shareholders.The two curves are basically on top of one another at the point at which Yang succeeded Semel.
As inept and ineffective as Semel had been, Yang was no picnic. From that point in June of 2007, the S&P declined about 40%, since the curves were both slightly positive at the point of Yang's accession.
In that same time period, Yang managed to drive Yahoo's price down about 60%, or an additional 50% greater loss than that of the S&P.
Reading this morning's Wall Street Journal, I was somewhat shocked that the board has only just retained a search firm to replace Yang. And that the value-destroying co-founder isn't actually out the door yet. He won't leave until a replacement is found.
Oh my. Poor shareholders.
What if nobody wants the job?
In this era, it is no longer proper etiquette to parachute into a firm as CEO, sell or dismember it within a year, and then grab a huge payout and ride off into the sunset. And Susan Decker has now been at Yahoo long enough to be part of the problem, not the solution.
As my earlier posts about Yahoo, one of which is linked to the already-linked post mentioned above, noted, the company's basic business concept is now bankrupt. There is no real value left to manage and grow.
If the board were really smart, they'd send Jerry Yang packing right now, have Carl Icahn call Steve Ballmer, and just sell the whole mess.
Shareholders would get something, and no longer risk getting even less as the aging technology-based online firm slowly sinks into irrelevance.
Once a replacement is found, though, s/he will take time to 'add value' by assessing the situation, and more time- and value- will be irreparably be lost.
This may just be a golden opportunity for Yahoo to escape with what little value remains, intact.
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