Embattled Yahoo co-founder and CEO Jerry Yang took the stage at the Web 2.0 Summit yesterday, telling host John Battelle that it has been an "amazing year" for the company. He then delivered a shocker: Despite fighting Microsoft's advances off in the beginning of the year, Yang declared that a Microsoft should still purchase Yahoo. It would be a great opportunity for the company, he added.
If you're wondering what Yang is up to, you're not alone. While investors would welcome Microsoft coming back to court the company, many are fed up with Yang's muddled actions, and are losing confidence in his ability to run the company.
Alley Insider’s Henry Blodget, an investor in Yahoo and a long-time critic of Yang, has called on Yahoo's CEO to focus on moving forward and cutting costs, rather than seeking buyouts that have long since been taken off the table.
"Yahoo needs to fire about 3,000 more people and cut a similar amount of non-headcount cost."
Blodget also criticizes Yang for bringing in consulting company Bain to help with layoffs, suggesting that it's an added expense that Yahoo can ill afford.
With online ad revenue shrinking as fast as the market is crashing, other investors are lashing out against Yang as well. Some have even composed poems to express their frustration with Yang or wish for another deal with Microsoft, but message-board postings on Google Finance and elsewhere are a more common way to vent:
jtbuck1:
“MSFT will probably bid again for YHOO, but it will be around the price it is currently trading or lower. There is absolutely no reason to pay a premium anymore. The economy is in recession and revenues are likely to fall for the next few quarters as ad dollars will be hard fought.”
Many posters seem unable to forgive Yang for bungling the original Microsoft deal, but a few fret over the future where a deal with AOL might bring even more damage.
Writers and readers commenting on Barron’s Tech Daily Blog share that concern. One reader said Yang's AOL/Yahoo proposal is like "[combining] two struggling companies together and praying that all the problems would go away by magic." Barron blogger Eric Savitz and Seeking Alpha agree, saying that a Yahoo/AOL deal would dilute shares for investor and create redundancies. Moreover, they say AOL would bring a second, less-significant portal and no new search or advertising technology to Yahoo.
But while critics are willing to lash out at Yang, few have concrete suggestions about how Yang could move the company forward. One thing is certain: If Yang wants to remain at the helm, he needs to make some tough, dynamic decisions that can help turn Yahoo around and heal investor confidence.
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