And Now Yahoo Has Put Itself Up For Sale…

Former Yahoo chief executive Carol Bartz said she had been fired over the phone by chairman Roy Bostock. Photograph: Robert Galbraith/Reuters

In addition to firing CEO Carol Bartz, Yahoo’s board has now put the company up for sale.

 The person who briefed the Wall Street Journal on the Bartz firing also told the paper that “Yahoo is open to selling itself to the right bidder.”

That’s the equivalent of sticking a FOR SALE sign on the lawn.

The board canned Bartz, the WSJ’s sources say, after studying the company’s assets for two weeks and concluding that Bartz was doing a lousy job. If this is really true, one wonders what on earth the board has been doing for the past two years, while pretty much everyone else concluded the same thing.

There’s no quick fix for Yahoo. The company needs to embrace the fact that it’s now a media, content, and communications company–and make heavy investments in those areas. It needs to radically streamline itself. And it needs a leader with a clear product vision and the ability to execute on it.

The trouble with the above prescription is that, if the board is equally happy to just sell Yahoo, this leader will be even harder to find. And, in the meantime, the company will be even more firmly entrenched in the purgatory that has frozen it for the last couple of years.

Source: Business Insider

About Abdul Rahman Alieh

I use this space to share interesting videos and snippets from articles and books I come across. I hope you find this blog interesting. Can't wait to read your comments! Abdul Rahman

2 comments

  1. Mohammed Shamseer

    Ohhh!!!!!

  2. In January 2008, Microsoft offered to aquire Yahoo for $44.6 Billion! The proposal back then consisted of cash and Microsoft stock, valued Yahoo shares at $31 a share, a 62% premium on Yahoo’s closing price.

    Below is part of the letter sent by Microsoft to Yahoo!

    “I am writing on behalf of the Board of Directors of Microsoft to make a proposal for a business combination of Microsoft and Yahoo!. Under our proposal, Microsoft would acquire all of the outstanding shares of Yahoo! common stock for per share consideration of $31 based on Microsoft’s closing share price on January 31, 2008, payable in the form of $31 in cash or 0.9509 of a share of Microsoft common stock. Microsoft would provide each Yahoo! shareholder with the ability to choose whether to receive the consideration in cash or Microsoft common stock, subject to pro-ration so that in the aggregate one-half of the Yahoo! common shares will be exchanged for shares of Microsoft common stock and one-half of the Yahoo! common shares will be converted into the right to receive cash. Our proposal is not subject to any financing condition.

    Our proposal represents a 62% premium above the closing price of Yahoo! common stock of $19.18 on January 31, 2008. The implied premium for the operating assets of the company clearly is considerably greater when adjusted for the minority, non-controlled assets and cash. By whatever financial measure you use – EBITDA, free cash flow, operating cash flow, net income, or analyst target prices – this proposal represents a compelling value realization event for your shareholders.

    We believe that Microsoft common stock represents a very attractive investment opportunity for Yahoo!’s shareholders. Microsoft has generated revenue growth of 15%, earnings growth of 26%, and a return on equity of 35% on average for the last three years. Microsoft’s share price has generated shareholder returns of 8% during the last one year period and 28% during the last three year period, significantly outperforming the S&P 500. It is our view that Microsoft has significant potential upside given the continued solid growth in our core businesses, the recent launch of Windows Vista, and other strategic initiatives”.

    Let’s wait and see for now. Things will definitely get interesting!

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