Yahoo's Yang resigns: Why it's a good, but late move

Yahoo's Yang resigns: Why it's a good, but late move

Summary: Yang infamously turned down a $31 a share, or $44.6 billion, offer from Microsoft. He should have left 10 minutes after screwing that Microsoft deal up.

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Jerry YangThe resignation of Jerry Yang from Yahoo's board---as well as Yahoo Japan and Alibaba---removes an obstacle that could set the company up for a more dramatic restructuring. Shame Yang didn't split earlier.

In a letter to Yahoo Chairman Roy Bostock, Yang wrote that he wanted "to pursue other interests." He added that he was enthusiastic about Scott Thompson as CEO.

The reality is that Yang should have gone years ago. In fact, Yang's decision to turn down an offer from Microsoft in 2009 was a fatal management move that was nearly impossible to recover from. Yang infamously turned down a $31 a share, or $44.6 billion, offer from Microsoft. He should have left 10 minutes after screwing that Microsoft deal up.

Now what?

Yang's resignation could set up a more dramatic restructuring at Yahoo that could revamp the company. The departure of Yang also gives Yahoo more time to think through its next move. Yang was too emotionally tied to the company he co-founded. With Yang gone, Yahoo can better pursue a few options that may have clashed with its co-founder. Among them:

  • The stage is set for Yahoo to elegantly---and profitably---exit its Asia assets for a nice windfall worth billions.
  • Yahoo can sell out more easily. Yang wanted Yahoo to stay independent and previously spurned Microsoft. Thompson has no such ties to the past. In other words, Yahoo can now more easily work around Yang's 3.6 percent stake in the company. It's much easier to work around Yang if he's not on the board.
  • The company buys itself time to restructure and figure out its future course. Yang was a lightning rod for disgruntled shareholders such as Third Point LLC. With Yang out of the picture, Yahoo can relieve some pressure while restructuring in or out of public view.

The afterhours movement in Yahoo shares---up 3 percent---tells you Yang's departure is welcome but there are doubts about the company's turnaround prospects.

Related:

Can Yahoo’s new CEO Thompson harness big data, analytics?

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36 comments
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  • If people knew the real number he turned down they know what an even bigger

    HUGE FOOL he was and how much more he and his hideously inflated ego TOTALLY SCREWED yhoo's shareholders. Jerry "pull my" Yang will not be missed.
    Johnny Vegas
    • True that

      @Johnny Vegas And how everybody was bashing MS for trying to take over, all the while ignoring Yang's poor leadership.
      otaddy
      • RE: Yahoo's Yang resigns: Why it's a good, but late move

        @otaddy Not everybody. I called it as it was at the time, yet I was of course also attacked. But then I recognised it as one drowning man throwing another a lead weight. Neither has any competence.

        Turning down a deal that valued the company he founded at twice its market CAP was dumb dumb dumb. But god knows why Microsoft wanted Yahoo. What did Yahoo have that Microsoft needed? Indeed, what did Yahoo have that ANYONE needed?

        Massive mess. Now we get the fire sale.
        Graham Ellison
      • RE: Yahoo's Yang resigns: Why it's a good, but late move

        [i]But god knows why Microsoft wanted Yahoo. What did Yahoo have that Microsoft needed? Indeed, what did Yahoo have that ANYONE needed?[/i]

        [b]Control[/b], not to mention even [b]less[/b] choice for consumers out there.
        ScorpioBlue
      • RE: Yahoo's Yang resigns: Why it's a good, but late move

        @otaddy Let's us not forget that while MS is a juggernaut and has tons of cash, they're not exactly the leaders in innovation. They tend to buy innovation so, I wasn't keen on MS buying Yahoo either.
        pkthn_parker@...
  • RE: Yahoo's Yang resigns: Why it's a good, but late move

    Good for him to stage his exit but before we all crzp on him we should not forget that he was a pioneer in starting Yahoo and creating tremendous value. Much more than all those collectively jumping on him!
    Bradish@...
    • Fait Accompli?

      @Bradish@...The writer and ever colorful Johnny Vegas so seemingly smugly operate under the assumption that an MS takeover was the best thing since sliced bread. And that...'10 minutes after screwing that Microsoft deal up.'
      Not everything in the world can be reduced to the annual profit and loss statement. I know that's a radical dude concept, bordering on nerdy/geek heresy. That other considerations in life dare to yet exist.
      Quality of life issues, not only quantity of units sold, and profit dollars generated in fierce competition can be what the technological world is measured in. Sad to see it all be treated like a mere horse race.
      Please tell me we're not all there. Your post gives me hope that others can leave the mad rush of the sometimes vicious mob mentality, the sometimes swarming stampede that infects many Tech Bloggers.
      PreachJohn
      • RE: Yahoo's Yang resigns: Why it's a good, but late move

        @PreachJohn

        Or,,, shareholders dum[ Yahoo stock and buy something that performs.

        Guess which is more likely...
        NoAxToGrind
      • RE: Yahoo's Yang resigns: Why it's a good, but late move

        @PreachJohn , Yahoo is a public company. Meaning it has beeen already sold to the public, and is responsible to its shareholders. Should it have decided to stay privatly owned, Yang's move to decline MS offer would have been nobody's business but his.
        One can not expect to have a cake and eat it too.
        ForeverSPb
      • That there New York City Hedge Fund is get'n what they wanted.

        @PreachJohn >

        "Seriously, Preacher John has a point when it comes to Yahoo! since they were the inventors of the first 'two' web browsers. One sold to Microsoft and well I guess they kept one. Any way you slice it being a global entity it is important to stay intact at any cost. Only a hedge fund would be trying to change the rules after entering the game to quantify their personal interest. Just take President George Bush and the recent mortgage collapse for example. But here the losers and winners will be pre-determained. The MSN common stock shareholders will come out on top of this one. Personally those guys in NYC will only help the security of the internet once they sell out to Asia."
        Zurk_Orkin
    • RE: Yahoo's Yang resigns: Why it's a good, but late move

      @Bradish@... BS. Yang has horrible judgement.

      Yahoo was always a horrible company. This web portal/search engine thing was named after the savage, filthy creatures, with unpleasant habits from Jonathan Swift's 'Gulliver's Travels. Why? Who knows? But in a world rich with vocabulary, it was obvious a smarter competitor would come along with a better named product. And it really does all start with a name.
      Graham Ellison
  • RE: Yahoo's Yang resigns: Why it's a good, but late move

    you are so much into the non-sense of selling at all cost. will anybody remember SUN microsystem after five years? at least yahoo is still alive and kicking. can you still say that for SUN? you are right, that after some time in the life of a business, that the founder reach the point of LEVEL OF INCOMPETENCE in relation to the size of the business, but then that doesn't mean that the founder is wrong and grossly incompetent as a person. job was kicked out because the management believe that his level of incompetence had been reach and he will no longer contribute to the well-being of apple. when he came back, he did not sell apple to SUN or anybody interested for that matter, then the rest is history. and apple is not some subsidiary of a big conglomerate, but a big business in itself. and where are DEC, Compaq, SUN, etc.
    kc63092@...
  • RE: Yahoo's Yang resigns: Why it's a good, but late move

    "Yang infamously turned down a $31 a share, or $44.6 billion, offer from Microsoft. "<br><br>Which was the right thing to do. It would have hurt more than it would have helped.<br><br>"In fact, Yangs decision to turn down an offer from Microsoft in 2009 was a fatal management move that was nearly impossible to recover from. "<br><br>The damage to Yahoo if it had succeeded would have been far worse.<br><br>"Yang was too emotionally tied to the company he co-founded."<br><br>In other words, you wanted to see Yahoo die just to make the money counters happy.<br><br>I disagree. A purely financial move is 100% the wrong move if it would have killed everything else.
    CobraA1
    • RE: Yahoo's Yang resigns: Why it's a good, but late move

      @CobraA1

      It's blatantly obvious you are not a Yahoo stockholder.
      NoAxToGrind
      • RE: Yahoo's Yang resigns: Why it's a good, but late move

        @NoAxToGrind LMFAO!
        malcolm@...
      • RE: Yahoo's Yang resigns: Why it's a good, but late move

        @NoAxToGrind They had more than enough time to bail. The only ones who were harmed were the speculators who were looking for a quick pay day.

        An they should expect to be burnt once in a while when a deal does not go through as plan.
        Knowles2
    • RE: Yahoo's Yang resigns: Why it's a good, but late move

      @CobraA1:

      Exactly. Microsoft getting ahold of Yahoo's services would have been catastrophic for its customers.

      Does anyone remember HoTMaiL? The original webmail service? I was one of the early adopters. It was great... right up until Microsoft bought them out. It took less than a month for them to turn it into such a bug-ridden, unsuable piece of crap that I abandoned the service entirely and switched to Yahoo Mail. And I've never regretted the decision. But if Microsoft were to end up owning Yahoo Mail, I don't know what I'd do. My online identity has been associated with that address for a very long time now, and changing it would be a huge hassle, but so would having Microsoft destroy the usability of my email provider *again*!
      masonwheeler
      • RE: Yahoo's Yang resigns: Why it's a good, but late move

        @Cobara1:

        Exactly. Microsoft getting ahold of Yahoo's services would have been catastrophic for its customers.


        Well, that is your opinion...
        NoAxToGrind
      • RE: Yahoo's Yang resigns: Why it's a good, but late move

        [i]Well, that is your opinion...[/i]

        No, it's fact. There would have been [b]less[/b] choice out there as far as email services go. And I could really care less about their stockholders.
        ScorpioBlue
    • That's Quotable

      @CobraA1---'I disagree. A purely financial move is 100% the wrong more if it would have killed everything else.'
      PreachJohn