The recent Bloomberg article on Yahoo is crazy.
Yahoo has plummeted 91 percent over the past decade as it failed to keep Google and Facebook Inc. from siphoning off Internet users and advertising revenue. Yahoo, which rejected an offer from Microsoft or as much as $47.5 billion three years ago, is now valued at $14 billion, according to data compiled by Bloomberg.
“What you get is the core U.S. business for free,” Di Zhou, Santa Fe, New Mexico-based analyst at Thornburg Investment, which oversees about $80 billion, including Yahoo shares, said in a telephone interview. Yahoo Japan and Alibaba are “more than enough to explain the current stock price.
Crazy. Yahoo - with all of it’s existing products in Mail, Messenger, Finance, News, Autos, Groups, Flickr, Sports, etc. — has zero value when priced by the market. So none of Yahoo’s core products have any growth that can be discounted back into value today. Every Yahoo branded products can, in some ways, be supplanted by a competitor, and planned new features do not matter because the market has no confidence in Yahoo’s roadmap to attract users right now. The only value comes from its external holdings in Asia.
It’s crazy to think of a company that has millions of users and a stable of products performing well to have zero value.
I spent the last two days pulling together a long thesis - literally the longest post I’ve ever written on Tumblr -about the reasons for Yahoo’s drop - the whys and hows from my perspective as someone who worked on the business and product side for Yahoo. It mostly involved recollections of meetings involving things like Panama and APEX and LRECs and SKYs along with ’social feeds’ and data portability and privacy and ‘media-social-platform’ and all the other #$&! jargons that I love to mock so much.
But then, re-reading it and sending it around to a few friends, I realized the post didn’t really say anything new and wasn’t all that interesting given all the sour grapes and hindsight analysis from other people on places like Quora — or worse (my biggest pet peeve about the tech world), pundits who’ve mostly failed at building products opining behind the easy comfort of their keyboards as they try to make a name for themselves as experts on the easy trends of the day.
I think it would be much more interesting to think about why talented people sometimes can’t change a company, how org structures affect innovation and all the lessons I learned trying to build revenue at one point and building engagement at another point for Yahoo. I don’t have it down yet since a lot of my opinions are locked in my own biases - I loved some of the products and features I worked on, but I also realize that some of the things I did failed; and that I could have done more and learned more.
A lot of it was fun and I worked with some of the smartest minds I’ve ever known, but we also were myopic about some things and certainly a lot of things were frustrating. I could write a whole book about the adventures I had at Flickr, but how to do it without being disingenuous while being fair is pretty hard. I haven’t quite figured it out yet.
So like mom likes to tell me, stop talking until you’re sure about what you want to say.