Yahoo CEO says everything's for sale, at a price
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| Yahoo CEO Carol Bartz says she'll sell, but there's more to it than that. Photo: Yahoo |
Yahoo CEO Carol Bartz, not one for mincing words, took the stage at the D7 conference in Carlsbad, Calif. on Wednesday and said yes, she is willing to sell Yahoo's (YHOO) search business or all of Yahoo – for "boatloads" or "big boatloads" of money, respectively.
As always, the tech press ate this up. TechCrunch's Erick Schonfeld, a smart guy and a former colleague, called it "a softening of her public stance," since when she arrived in January she said Yahoo was not for sale. While he's technically right – she even said she had softened her position – I see something different in her comments.
I say Bartz still doesn't plan on selling Yahoo, or even the search business. Why? In reporting on Bartz for a recent feature in Fortune, I got a sense of how pragmatic she is. When Bartz arrived in January, she knew she had to announce that she was there to run the company, not to break it up and sell it, as a way of defining Wall Street's expectations. But Bartz is also a veteran executive who knows how this game is played. The truth is that in a well-managed public company, shareholders expect that everything will be for sale at a price. So her statement is probably more a statement of her philosophy than a shift in perspective.
Then there's the matter of how she phrased this. "Boatloads" of money? Come on. That's not the language of someone who's looking to make a deal during a global economic bust.
Even though Microsoft (MSFT), the only likely buyer of anything Yahoo's selling, is a very wealthy company by any standard, it's in no position to blithely spend boatloads of money on anything these days. When Microsoft CEO Steve Ballmer first offered a $45 billion boatload of money for Yahoo many moons ago, he planned to take on debt and mortgage his future profits to finance the deal. Today, with Windows and Office sales struggling in a recession, Microsoft is slashing jobs to boost a sagging stock price and praying that its upcoming Windows 7 operating system gives the company a boost. He's looking to do a search deal with Yahoo that makes him look thrifty, not generous.
If you have any lingering doubts left about Bartz's intentions, look at the conditions she set on any sale of Yahoo's search business. Not only would she require boatloads of money, but also continuing access to all search-related data and the right technology. In other words she wants to "sell" it, but maintain access to the most valuable parts.
This is a great idea for more than just search, actually. It works just as well for real estate. In fact, I would like to sell my home for boatloads of money, so long as the buyer does some renovations and lets me continue to live in it. Any takers? (GOOG)
If Yahoo sells it's search product, it might as well sell the whole kaboose. They need a Jonathan Ive type to architect a differentiated UI/service that delivers truly helpful results. Google's natural search product is actually quite weak. But it's better than a bad lot from MSFT, YHOO, and ASK.
Overture, Right Media, and even Yahoo Mail still have massive potential. But Yahoo needs to develop it.
BTW, CNNMoney.com should really consider using DISQUS or TypePad Connect. The commenting system here is archaic.
Microsoft did not fall. They are still a market leader with 85% market share and a potential killer app (windows 7)on the horizon. Lets not forget close to 30 billion in cash. Only a microsoft/yahoo tie up has a chance at providing google with a competitor. Yahoo and microsoft should improve the quality of their search results before attempting to go after google
I think it is short-sighted to write off any possibility of something knocking off Google. Remember just a few years ago Google and Yahoo were in opposite positions. Every industry monster inevitably falls. Yahoo fell, Microsoft fell, Google will fall. Remember that Apple came back from nothing, Nintendo came back from nothing, hell Nissan came back from nothing.
Second, online advertising will continue to grow and eventually consume most of the money going to print ads. Have you ever seen quality products fail in a growth sector. Almost never! Yahoo could easily co-exist and be extremely profitable in an environment where Google is an industry leader.
Thirdly, Google isn't a monster everywhere. Yahoo could very easily reach out to international markets. Google is nothing in China, India, not nearly as large in Europe. In the next decade or so, the number of internet users worldwide will double. A global strategy is a winning strategy for Yahoo. Also don't forget mobile advertising! Completely untapped market.
…I would have still taken the $45 billion though, because…well, it's $45 billion for christs sake.
Good points except, there are many excess housing inventory in this market but there's only "One" Yahoo that can compete with Google. Unlike current housing market, which will likely take years to recover. Online advertising market is expected to grow into $50 billion industry in a couple of years. It is too rich of a market for Google to just simply monopolize.
I think Ms. Bartz is trying to appease the Yahoo stockholders (like myself) who thought we had a terrific deal with MSFT not too long ago. It's going to be a very long time before YHOO is worth $45 billion again
"Far lower"? How about next to nothing. This dill weed still has no concept of what it will take to steal market share from the Giant.
Step away from text and give people a choice of what type of search they want. You are not going to sell Yahoo for at least 10 years (if they still exist then).
Ride this out and come up with your own new search platform. Otherwise stick a fork in Yahoo and Jerry Chang and send him back to Stanford delivering pizzas where he should have been after rejecting MS first offer.
Agree!!! Tough road for Yahoo ahead. Yahoo should have taken the 45 billion offer from Microsoft earlier. This is not a good time for Bartz to make such public statments. The next offer if it comes through is most likely going to be far lower than 45 billion.
HIlton Head – The name is Jerry Yang and at least he went to Stanford which is probably out of your league. Personally, I would not want Microsoft or Google controlling everything so there is some merit to his decision. Hopefully, Yahoo will undergo some improvements and all the stockholders will be happy. It would be unfortunate to see Yahoo disappear.