Friday, August 10, 2012

The beatings will continue until moral improves- Yahoo edition

I have a small position in Yahoo- thankfully it represents past gains, making the position virtually free- in my portfolios. I say thankfully as it appears that Ms. Mayer is pulling back on previous plans to return cash to shareholders and instead will pursue an empire building strategy (at least in my opinion).

The below is from the recently released 8-K.
---------------------------------------------------------------------------------------------------------
New Chief Executive Officer and Review of Business Strategy
On July 17, 2012, Marissa Mayer became the Chief Executive Officer and a member of the Board of Directors of Yahoo! Inc. (the “Company”). As reported in our Form 10-Q for the quarter ended June 30, 2012 filed today with the Securities and Exchange Commission, Ms. Mayer is engaging in a review of the Company’s business strategy to enhance long term shareholder value. As part of that review, Ms. Mayer intends to review with the Board of Directors, among other things, the Company’s growth and acquisition strategy, the restructuring plan we began implementing in the second quarter of 2012, and the Company’s cash position and planned capital allocation strategy. This review process may lead to a reevaluation of, or changes to, our current plans, including our restructuring plan, our share repurchase program, and our previously announced plans for returning to shareholders substantially all of the after tax cash proceeds of the initial share repurchase under the Share Repurchase and Preference Share Sale Agreement we entered into on May 20, 2012 with Alibaba Group Holding Limited.

In some investor's opinion, Ms. Mayer may be attempting to build a baby-Google. If I remember correctly, Microsoft and Yahoo tried this strategy repeatedly in the past, throwing good money after bad. Neither has been able to crack Google's position as the top search engine. Unless Ms. Mayer is looking to completely re-engineer Yahoo in a new, disruptive direction, instead of fighting a David vs. Goliath battle against her former employer, I may have to rethink the position.

 ...... Just an update. I had a problem with my Yahoo email account and was asked to contact customer service. I actually had to go through Google to find out how to contact Yahoo's customer service. I hope the board gave her plenty of time to fix Yahoo;s problems. 


No comments:

Post a Comment