With Yang out as Yahoo CEO, Steve Ballmer licks chops

With Yang out as Yahoo CEO, Steve Ballmer licks chops

Summary: Jerry Yang is no longer CEO of Yahoo. After a short and stormy tenure as CEO Yang is back to being Chief Yahoo.

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Jerry Yang is no longer CEO of Yahoo. After a short and stormy tenure as CEO Yang is back to being Chief Yahoo. Steve Ballmer, Microsoft and a search deal--if not outright acquisition--may not be too far behind.

The official line from Yahoo (Techmeme):

Yahoo today announced that its Board of Directors has initiated a search for a new Chief Executive Officer. Jerry Yang, co-Founder of Yahoo!, has decided to return to his former role as Chief Yahoo! upon the appointment of his successor as CEO, and he will also continue to serve on the Board. Yang, 40, assumed the CEO role at the Board's request in June 2007, and he has led Yahoo! through a strategic repositioning and transformation of its platform.

The reality is Yahoo shares closed Monday at $10.63 when Yang could have sealed a buyout more than $21 ago. Yang's failure--or stubbornness to seal some sort of deal left shareholder in a lurch. No amount of revisionist history was going to change that fact.

Also see: Jerry Yang to step down as CEO, back to Chief Yahoo

The time is now for a Microsoft-Yahoo search deal

One thing is clear: Yahoo did reposition the company. It's just that Wall Street didn't like Yahoo's plan all that much. The next Yahoo transformation is likely to be as a subsidiary or partner of Microsoft. There's a decent chance that Yahoo may not even get around to naming a new CEO if there's a sale in the works.

The odds still favor a search deal with Microsoft. After all, a search deal just makes sense. Microsoft gets its search market share and Yahoo can focus on what it does best--be a great media property.

That reality wasn't going to happen with Yang at the helm. Yang was like the major league closer that blew one too many saves. At some point, a head needs to roll.

Microsoft Steve Ballmer, who still waffles like an Eggo about whether a Yahoo deal makes sense, is likely licking his chops right now. A new CEO isn't going to come in with this "Yahoo must stay independent" mantra. The new CEO is going to have a simple mission. Deliver value. And that means a sale or partnership with Microsoft. Here's what a search deal would look like:

For some, Yang's departure--and an eventual link with Microsoft--is going to be worrisome. However, I'd look for the bright side. A deal with Microsoft will allow Yahoo to focus on being what it really is--a media company. For all the talk about how Yahoo has lost its mojo, no site aggregates eyeballs better. Yahoo is a vital service to millions, including a lot of folks that don't care what search engine it uses.

Topics: Social Enterprise, CXO, Enterprise Software, Legal, Microsoft

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22 comments
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  • Microsoft might buy a content company

    Microsoft apparently needs help with content.

    Yahoo also has a search business, which would help improve market share and ad revenues. A less important but still significant bonus.
    Anton Philidor
  • I think bloggers here at ZDNet are licking their chops even more

    as no matter wahat direction Microsoft goes, they'll ethier claim "I told you so" or "How great it is that Microsoft did not make a deal with Yahoo".

    Wake me up when something concrete actually happens.

    Or does not.
    GuidingLight
  • RE: With Yang out at as Yahoo CEO; Steve Ballmer licks chops

    Follow Yahoo on Line Spout. http://www.linespout.com?q=yahoo
    ardesh
  • Ballmer played Google and Yahoo!

    Ballmer offered his price. Yang wanted more than Yahoo was worth. Schmidt got scared of Microsoft getting stronger in search. Ballmer stayed steady not folding. Yang convinced a scared Schmidt to tie up in a search deal. Ballmer knowing a thing or two about the DOJ pulled his bid and let Schmidt and Yang engage. Ballmer complained to the DOJ. Schimdt says forget it. Schimdt pulls the engagement. Yahoo already weak from a bad economy Microsoft comes back and gets a possible $11 per share discount from the $33 he offered earlier.

    Point of the story, over the last two years Microsoft been cautious on reporting their earnings. They knew the economy was slowing. With that being in mind, Ballmer took a calculated risk of offering $31 a share. If anyone was following,it was a rumor in January 2007 that Ballmer offered $40 a share.

    Yahoo got greedy and it backfired. So which is the smarter company. [b]Microsoft, Google or Yahoo?[/b]
    1g2j
    • and Microsoft has been bleeding market share.

      On Desktops and office suites, they are will the dominant player (making roughly 70% of annual income for Microsoft) but in the area that Yahoo and Google play, they are a distant 3rd (at best).

      So far, in the past 2 years, Microsoft has had 2 major Internet properties in the same area, these went (in the past 2 years) from (for MSN, the larger of the 2) 6.40% to 3.11% and (for Live) 0.57% to a peak of 2.64% a year ago and now at 1.57%. Yahoo, in this same period, has gone from 11.93% to a peak of over 14% and back down to 10.45%. This means lower advertising revenues for all 3 properties. Want to guess where the advertising revenues are going, it has not helped Microsoft much.

      So, which is the smarter company in your opinion?
      B.O.F.H.
  • Anyone who thinks Ballmer is an idiot...

    ...should really reconsider their opinion now.

    An extroverted, sometimes over the top character? Yes. An idiot? No. Absolutely not.
    Sleeper Service
    • RE: Anyone ... ?

      <font color=grey><em>"Anyone who thinks Ballmer is an idiot...<br>
      ...should really reconsider their opinion now."</a></em></font><br>
      <br>
      Hmmm, I wonder what would make "anyone" "thinks" he is an ID10T?<br>
      Just a rhetorical question.<br>
      <br>
      ^o^<br>
      <br>
      n0neXn0ne
      • There's a point here...

        ...but it appears to have been absorbed by your waffle.
        Sleeper Service
  • Both companies lost their mojo..

    If they would buy Yahoo.. it's bad mojo multiplied with bad mojo.
    TedKraan
  • RE: Microsoft should buy a good operating system company.

    Then they'd be something to talk about.
    JCPayne1
    • You're right...

      ..they should buy the one with 90% of the market.

      Oh wait.
      Sleeper Service
      • RE: You're right... on

        ..they <em>have</em> ... one with 90% of the <a href="http://blogs.zdnet.com/security/?p=2188">malware/virus/spyware/botnet</a> market.<br>
        <br>
        Oh wait.<br>
        <br>
        ^o^<br>
        <br>
        n0neXn0ne
        • Because they have 90% of the commercial market.

          Do try to keep up.
          Sleeper Service
          • RE: Do try to keep up.

            <font color=grey><em>"Because they have 90% of the commercial market."</em></font><br>
            <br>
            And haven't yet been <a href="http://en.wikipedia.org/wiki/Product_recall" target="_blank">recall</a>-ed?<br>
            Just a rheterical question.<br>
            <br>
            ^o^<br>
            <br>
            n0neXn0ne
      • Good OS

        Good OS != 90% of the market share

        Lemming behaviour of the masses has always been a rather fascinating thing, hasn't it?
        TedKraan
      • So By The Same Token

        If everyone bought Yugos and they dominated the market but failed 25% of the time on the road, you would support the Yugo manufacturer when you knew there was a better model of automobile that was more reliable but you were just afraid to adopt it because the lemmings ran for the one with the pretty body and crappy engine?

        Nice.
        itanalyst2@...
        • OK and according to you

          what is that mythical more reliable OS that everybody
          should adopt? Linux? OS X? Solaris? OpenBSD?
          markbn
  • This sounds like AZ's $1.2 billion light rail bailing out senior officials,

    I don't know? Anything with the real money behave lke mature really nice people. I wish it wasn't Microsoft anymore. There are too many people that want to damage their goods. I just crawl using Microsoft
    rtirman37@...
  • RE: With Yang out at as Yahoo CEO; Steve Ballmer licks chops

    Now that MS heavily lobbied the DOJ to roadblock the Google/Yahoo search deal, it's got to be completely obivious that Google will respond in kind to any potential MS/Yahoo deal.

    Yup, there will be tons of Google lobby money going the DOJ's way, who will invesigate a MS/Yahoo deal with a fine toothed comb.

    Google will be the biggest pain in the @ss to MS if MS attempts a deal. A DOJ investigation will drag on for months, if not years.

    It will be fun to watch. Google will get even more market share, Yahoo and MS stock will tank, and Ballmer will be trowing chairs all over the place.

    Let the games begin!
    super_J
  • Quit Using That STUPID Pic Of Ballmer

    The one with his fingers on his chin looking like some retarded evil dictator.

    Nevermind, keep it....if it makes him look like a retarded dictator then leave it up.
    itanalyst2@...