Yang Giving Up the Good Fight and the Fate of Yahoo!

In Tuesday’s – 11/18/08 Wall Street Journal, it was reported that Yahoo’s co-founder will be stepping down after they find a replacement. Apparently Mr. Yang will stay on the board and remain a senior executive within Yahoo. With the rejection of the earlier Microsoft offer and now its co-founder about to step aside - the fate of Yahoo in general and whether it will remain an independent company remains unclear.

Of course the announcement on November 5, 2008 surely didn’t help (or the final nail in coffin) when Google decided to abandon their advertising partnership with Yahoo due to pending antitrust challenges by the Government. With Google essentially turning its back on Yahoo by backing away from their advertising partnership - everyone immediately speculated that Yahoo was back in play with Microsoft.

What Could Have Been

So the irony. . . because of Google’s move, the pressure on Yahoo is greater than ever for them to renew talks with Microsoft and sadly. . . get much less than the $33 per share that Microsoft had offered in May 2008.

A shame to Yahoo shareholders when you consider Yahoo’s stock as I type this is on 11/18/08 is at $11.71 per share. And, no doubt Yang has heard the roar for months from investors who kept saying he should not be the one to lead Yahoo – especially since only 66% of shareholders agreed he should stay in his current position. So, at this point – the Board is considering going with Susan Decker, Yahoo’s current president but some investors have said her former role as Yahoo’s Chief Financial Officer, still does give her enough experience to weather Yahoo’s uncertain future.

Timing is Everything

With the current economic environment and new people soon to be appointed in antitrust roles within the Government, the on-again-off-again negotiations with Microsoft remain in question. This past summer Microsoft’s Steve Ballmer mostly blamed Yang for the companies’ inability to draft an agreement. So, at this point who knows what will happen - no matter what – whether it was its partnership with Google or Yahoo being acquired by Microsoft, there will be less competition in the Internet advertising arena.