Yahoo is not only a company in decline, it is a company in chaos as a deal to sell off its Asian assets falters again amidst a battle for control of the company.
Yahoo is well known for its boardroom drama, but instead of toning down the temper tantrums and focusing on its future, the board is still a much unneeded source of distraction for a company that needs to decide on a focus point and then move together forcefully in that direction.
Yahoo had been in intense and difficult talks with China’s Internet powerhouse Alibaba and Japan’s Softbank to sell back its stake in the two firms. Yahoo was hoping to net $17 bn to plow back into its domestic operations and calm angry investors.
This isn’t the first time that talks have broken down, but Kara Swisher, the queen of Silicon Valley insider info at AllThingsD, quotes a source close to the talks that the fraught talks have taken their toll.
“The cumulative effect of all the disagreements of a deal already in the edge has not helped matters.”
Now, Alibaba and Softbank are reportedly reaching out directly to newly installed CEO Scott Thompson. A person familiar with the talks told the Associated Press that Yahoo’s negotiating team don’t seem to be on the same page as its leadership. In most companies, this would seem unbelievable, but it is all too plausible at Yahoo.
Scott Thompson, formerly of PayPal was just named the new CEO at the company at the beginning of the year, but already there is talk of rebellion within the company, pressure on him from an activist shareholder and the possibility of a new leadership.
Leaks from the company paint Thompson as a demoralising “meglomaniac” who recently “trashed” the efforts of the Yahoo product team. The company has been in a state of flux for years, and Thompson is planning a major shake-up of the product team, moves that have left even the well-connected Swisher confused.
With the ink barely dry on Thompson’s contract, activist shareholder Dan Loeb is pushing for a bigger shake-up, once that could possibly go all the way to the top. It’s not enough that the board forced out former CEO Carol Bartz, chairman Roy Bostock and founder Jerry Yang, Loeb wants even more change, says The Wrap’s Sharon Waxman.
In a filing, Loeb wrote, “It is imperative to accelerate the transition of the Retiring Directors and introduce new outside nominees.” It has led to speculation that even Thompson’s job isn’t safe. Loeb looks intent on trying again to make Yahoo a content company, nominating former CEO of media giant NBCUniversal Jeff Zucker and former MTV president Michael Wolf to the board.
With all of this drama and chaos, it’s no wonder the Asian deals are in jeopardy. It all leads to the question: Who is in charge of Yahoo? Until the company can answer that question, it won’t be able to chart a new direction and seal the deal with Alibaba and Softbank. Until then, Yahoo’s future is very much in doubt.
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May 1, 2016