Yang's out: time to go long YHOO?
Jerry Yang, founder, former CEO, and sandbagger of lucrative takeover bids has announced his resignation from the board of Yahoo, Yahoo Japan, and Alibaba. Personally I think this is fantastic, and we can all see that the market's loving this as well, but I’m curious what you monkeys (especially the ER guys) have to say about this. I know a lot of you follow this company so, how much of an upside can we expect here now that Jerry’s out of the way? Can Thompson really pull a rabbit out of his hat?
As great as I think this is, if they don't sell I doubt they can rebuild themselves to take on Google anytime soon. You?
Yahoo is the business equivalent of the Costa Concordia
Yang should have been out for a long time. He built a great company, then let it fall due to lack of innovation. Founders like Schwarzmann are smart because they know when to let go and let their successors handle the majority of operations and try not to meddle in the affairs of the company to maximize growth potential. Just think of Ari Gold and Terrance in Entourage, and you'll see numerous examples.
I'm still not dumping my cash in Yahoo! stock though, would prefer to invest in other stocks with greater potential. Once Yahoo! sells its Asian businesses, there's little value left in its US operations. Might as well sell off the company to Silverlake etc. and distribute the earnings back to shareholders.
I wouldn't go long Yahoo, but I think this means we can at least rule out any future political struggles, as occurred during Microsoft's failed purchase. Whether anybody would pay a sizable premium for Yahoo now remains to be seen. This isn't a quick turnaround for a PE firm...you are competing with Google. MSFT might look into it, but they sure aren't about to pay $33 a share.
Yahoo doesn't strike me as a compelling company. Why would the user choose them over Google? They don't have the enterprise advantages of MSFT either. I think their best hope is to become a online media hub, as AOL is trying to do, but that is not a massively profitable business.
I'm not sure I can name a single thing that yahoo offers outside of their fantasy football function that I have ever even considered using.
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