Who Should Buy Yahoo? For now, Nobody!

Monday, June 25, 2007 | 2 comments

While I suggested 2 years back, that Yahoo and eBay should merge, at the moment, it appears that Yahoo has created a bigger mess than what eBay (or anyone else for that matter) ought to try to clean up on their shareholders’ clock.

eBay, on the other hand, for the moment, looks like it has a plan. It showed guts by giving Google a whack in its butt for behavior that seems juvenile at best, and exhibits an astounding lack of class. It has been sending signals that it wants to reduce the $26 Million monthly advertising spend on Google by acquiring vertical search engines and media properties like StumbleUpon, to absorb some of that ad budget. I think, they ought to stay focused on executing on that plan, rather than meddle in the Yahoo chaos.

Microsoft is another company that has its hands full with execution problems. Adding Yahoo to that pile would be like asking someone who cannot clean his own ass to clean someone else’s as well.

What about Private Equity? Sure, these days, the answer to all problems is Private Equity. In this case, perhaps, the best answer too. Is it necessary though?

Yahoo is a good company, with great assets. But it has no strategy, and no management that knows how to execute. This is a company that should get on its Board and Executive Team a constellation of turnaround experts and a series of strong GMs who can run P&Ls. They should put their top verticals under these GMs. By this, I mean real P&L owner GMs, not some dummy functional role that is “called” a GM. At Yahoo, today, finger pointing is easy and rampant. It’s because, ownership and accountability is highly convoluted.

I will keep saying, this company can be turned around. But it needs people who know how to turn things around. Semel knew, but ran out of gas. The company needs someone with fresh energy and intensity.

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