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2015-11-19

Starboard Value Letter to Yahoo $YHOO and CEO Marissa Mayer (video)

UPDATE 9 Dec 2015Yahoo $YHOO Update: Reverse Spin Off Planned, Webcast Replay

UPDATE 24 Nov 2015Yahoo CEO Marissa Mayer Faces Morale Challenge - WSJ"When the Ms. Mayer is forced to deliver bad news, she employs what she calls a “jiu-jitsu move”—trying to create a diversion by producing tantalizing information, according to people who have worked closely with her. For example, Ms. Mayer created an accounting metric called “Mavens” designed to spotlight the growing parts of Yahoo. The grouping includes revenue from mobile, video, native and social ads but excludes Yahoo’s largest portion of revenue—its shrinking business of display ads on desktop computers."

UPDATES 20 Nov 2015:
  • Yet Another Top Yahoo Media Exec Departs | Re/code: "...Barrett came to the Silicon Valley Internet giant in 2011 after a long and varied career in interactive media, including at the Los Angeles Times, ABC and Time Inc. He has most recently reported to Martha Nelson, the SVP of all of Yahoo Media. More pertinently, Barrett has been part of a major exodus of talent from Yahoo, which is still struggling under the leadership of CEO Marissa Mayer. Another top media exec, Ken Fuchs, also departed recently, as well as media head and CMO Kathy Savitt. Pressure on the former Google exec (Mayer) is increasing as press and also investors are calling attention to Mayer’s management and strategy for making the company relevant again..."

  • Forbes gives the details of the ongoing disaster at Yahoo: The Last Days Of Marissa Mayer? - Forbes: "... most say a confused strategy and mismanagement, specifically from Mayer, has undermined any attempts at a turnaround. Yes, she originally brought hope, a badly needed focus on products and a keen understanding of technology. But as pressure to deliver results has mounted, there’s widespread belief, as reflected in that employee survey, that she’s no longer up to the task. The past few months have seen a mass exodus..." (emphasis added) - See also: SunTrust stock analyst Bob Peck to Yahoo directors: Time to fire CEO Marissa Mayer? - Silicon Valley Business Journal - BTW: When did Marissa Mayer become Yahoo CEO? Answer: July 17, 2012.

It has become increasingly clear that Marissa Mayer is not only grossly overpaid, but is way over her head as CEO of Yahoo. After disastrous moves that have cost Yahoo (NASDAQ: YHOO) shareholders hundreds of millions of dollars, activist investor shareholder Starboard Value has launched a new tack in a letter sent to Yahoo (pdf), sell Yahoo's core business and have the Yahoo corporate entity continue to hold its current shares in Alibaba (NYSE:BABA) and Yahoo! Japan (Tokyo Stock Exchange: Yahoo Japan Corporation) instead of the announced spin-off of those investments to Aabaco Holdings which risks unfavorable tax treatment:

"... we believe selling the Core Business now is the best outcome for Yahoo shareholders. We urge you to change direction and do the right thing for shareholders. As we have expressed to you, we expect the shareholders’ interest to remain of paramount importance and will look to make significant changes to the Board if you continue to make decisions that destroy shareholder value." (empasis added)

Principal domain names of companies referenced:
Yahoo - yahoo.com
Starboard Value -  starboardvalue.com
Alibaba - alibabagroup.com  /  alibaba.com
Yahoo Japan - yahoo.co.jp

For further reading:
NYU Professor: Yahoo Should Be Euthanized, and Marissa Mayer Is the Most Overpaid CEO in History - Bloomberg Business (video below):

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