If you were wandering around the internet in 1994, finding “Jerry and David’s Guide to the World Wide Web”, must have been similar to an ancient Greek bumping into Pythia and having a chat.
In the ancient days of the web, finding other interesting things was rather difficult. This simple guide, became Yahoo.
Fast forward 11 years and Yahoo was one of the first ‘new media’ companies to grow old. It’s Search engine stagnated, the strategy chopped and changed as did the CEOs. However, in 2005 a strategic swap in China (merge Yahoo! China with Alibaba, plus $1Bn investment) would bring Yahoo! some good news and some difficult issues.
The activists started a co-ordinated attack from mid 2014. A nice example is this article by Nicholas Carlson. As you may notice, there’s a fair bit about questioning the character of CEO Marisa Myer whilst also highlighting the desire to get the $39Bn Alibaba stake returned to investors.
By December 2014 activists like Starboard Value were doing all they could to ensure that they received the benefits of the Alibaba stake.
However, the key point is that between 2005 and 2014, revenue has gone nowhere (relative to competitors). The sad fact is that the core Yahoo business is worth very little when compared to it’s associated investments.
The latest strategy is to focus on advertising formats for Mobile, Video, Native Advertising and Social. It’s not exactly a revolutionary strategy and even though Yahoo! are likely to make some headway in the Mobile space, it’s not going to move the revenue needle from $5Bn to $10Bn in the next year.
With the stake spin-off Mayer buys some time to demonstrate the value of the MVNS approach. However, the future of Yahoo is likely to be decided by SoftBank of Japan. The CEO of SoftBank Masa Son helped to bring together the Alibaba / Yahoo ‘merger’, SoftBank also owns 35% of Yahoo Japan ($7.5Bn). Thus it could be Masa who decides how long Mayer actually gets to build a new Yahoo.
Image courtesy of Photo Pin.