Kara Swisher raises the spectre of a private equity takeover as Yahoo’s price slides below $20. This would put its market cap at around $27bn and put the company at the mercy of corporate raiders who would make Yahoo execs pine fondly for a Microsoft takeover.
The underlying message is that if a private equity group got hold of Yahoo they would gut it of its profitable businesses then mercilessly dispatch money losing fluff like Flickr. I don’t think this would be any bad thing, in fact I think it is probably the best way to get value from Yahoo and it would also set diamonds like delicious free or at least to a company that truly understands them.
Reality bites
If you read Glassdoor the complaints about any of the large tech firms is that they are overly bureaucratic. If there is a money machine attached to the bureaucracy then the markets pretty much let executives get away with their mad, pet schemes. However when the cash stops gushing in then the fun stops. Carl Ichann got tired of it with Yahoo and I suspect as each day passes facebook investors are getting tired of spray painted offices and beer pong competitions. When private equity firms see this stuff they don’t mess around, it all goes. And this is exactly what Yahoo needs: a dose of reality.
If that means the company being broken up then fine. Jerry may shed purple tears but he has only himself to blame.
Read more:
On Yahoo’s problems
On the return of Microhoo
Pic: Fake Steve
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