[SCROLL DOWN TO TAKE OUR POLL ON YAHOO’S FUTURE]
Extra! Extra! Read all about it: Semel Out, Yang In
Funny, Rafat doesn’t send out emails this time of day. Oh, I see: Terry Semel is out.
Stock: Short Term Impact
Jim Cramer said the stock would go up $3-4 when that happened, right now it’s up $1.60 (or 5.75%). This one will probably close above $30 on a combination of relief, euphoria and institutional money flowing back in.
This might be the best thing to happen since YHOO, since, well Semel came on board after the nuclear winter of 2001-03. The company could not make Wall Street happy, Semel will be the fall guy…
Why Now?
I knew that something was up, the stock was up almost $1 after days of slipping slowly, but surely.
Today’s volume was 58M, almost up twice the average of 23M. Look at the spike (underlined with yellow):
But I won’t lie, I did not think this was it. I was thinking Semel would stay longer and then deeper in the summer, he’d resign… depending on your definition of “deep in the summer,” June 18th was D-Day.
Mind you, after last week’s board meeting, you sort of thought that Semel was planning to leave the company… and today being June 18th, the company (read the stock) needs something - anything - to remove the cloud over its head.
Read Between the Lines
The fact that Yang is back in - and not Sue Decker or someone else - shows that this was not planned. After all, unless it was Yang’s plan to quit and one day return to run Yahoo!, this shows that the Board and Semel finally said “enough is enough.”
But why now?
The stock had done ok early on, then slipped after Q1 (apart from the MSFT/YHOO $50B merger news faux spike), I think that the Board and Semel (don’t forget Semel owns a boatload of shares and is laughing all the way to the bank while the denigrators dance on his tomb today, so to speak) so everyone wanted a reversal of YHOO’s stock fortunes and this will allow YHOO to maybe outperform Google in 2007, with 2 quarters left and a founder back at the helm, it’s almost possible:
In other words it’s just recently that Google surpassed YHOO. I know what you’re thinking: does it matter. Today Yahoo! is worth $40B (not even, at market close it was less than $38B) while Google closed at $160B! That’s 4 times more for Google.
Semel’s Legacy
Let me be very clear about one thing: Semel got wayy to much credit for the firm’s turnaround and will get way too much slack for its fall from the top. Semel did wonders by reducing the number of units Yahoo! had, and he did better than 99% of the people that Yahoo! could have recruited to fix things… but he also was unfairly blasted for things that Yahoo! should not have been blamed for (not buying Google, being one of them, for until the IPO no one knew Google would be worth 2-3 times Yahoo! within 2-3 years of the IPO!
Who is to Blame for Google being four times more valuable than Yahoo!?
The grand mistake in the YHOO/GOOG saga was YHOO using Google to power its search, and not “not buying Goog.” If that is the case, then every single investor who did not buy GOOG on IPO day is a fool (in other words: in hindsight, yes we’re fools but at $25B market cap on IPO day, it was not a Buffett-esque investment).
Looking Ahead
What this means for Yahoo!, frankly, is not much. The stock market will add some points to the beleaguered stock. Some investors who grew tired will probably add some shares… but ultimately, the fact is that this is one more blow to YHOO’s brainpower.
Long Term Possibilities for Yahoo!
It’s all about people. Does Jerry Yang have it in his body, mind and soul to run the largest Internet media company in the world?
Yahoo! is technically in a better shape to kick ass in the 21st century on the Web than MSFT, Google, Time Warner’s AOL, News Corp.’s FIM’s MySpace.
The question is: will Yang be the guy who has it in his belly to do that?
I don’t know. It takes a special person with a lot of drive, willpower and determination to right the ship at YHOO.
Will acquire Facebook to bring in someone like Mark Zuckerberg (as we wrote here in Part 2 or will YHOO:
Disclaimer: I own shares in YHOO.
Here is the post that got my attention from PaidContent.org, here is the official press release from Yahoo!, not to be outdone, the new CEO Jerry Yang chimes in here, on the Yahoo! blog.
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