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Yahoo CEO Jerry Yang To Step Down
JagsLive was one of several readers to point out Jerry Yang's departure as Yahoo CEO. He's not leaving the company; he will return to his former role as Chief Yahoo, whatever that entails. Yang has been under fire in recent months from investors for his handling of Microsoft's recent acquisition attempt."Yahoo, under fierce financial pressure, has begun a search to replace company co-founder Jerry Yang as chief executive, the company said Monday. 'Jerry and the board have had an ongoing dialogue about succession timing, and we all agree that now is the right time to make the transition to a new CEO who can take the company to the next level,' Chairman Roy Bostock said in a statement."
Only very few tech companies that are huge and have been around forever pay dividends. The only examples I can find in the tech sector that pay dividends are IBM, Intel, Sony and HP.
The entire point of a publicly traded company is to increase shareholder value. One easy way to do this is to simply give the share holders money in the form of dividends. The other choice is to invest back into the company. If the company is still growing then there's a good chance that investing $X million into R&D/employees/capitol improvements/whatever will result in the company improving it's market capitalization by more than $X mill. If that's the case, then that produces more value for the shareholder and is the proper choice.
Basically dividends, and stock buy-backs which are effectively the same thing, are an easy way out when a company has more money than it knows how to make useful investments with.
I'm not sure what your question is really about. Certainly many companies -- and nearly all that have been around for any length of time -- are profitable. Yahoo is quite profitable, generating over $600M of profit last year. So in that sense I'm not sure what you mean by "speculative gamble". Yes the market moves quickly and companies' fortunes can rise and fall, but it's been that way since capitalism was invented.
With regard to dividend payouts. In a high-growth company, the investors often prefer the company to retain earnings to fund future growth opportunities. When there aren't enough high-value growth opportunities and the cash starts piling up, usually companies will then start paying dividends (Microsoft, for example).
Because of US tax law, it's actually better for most investors if the company uses extra cash to buy back its stock (thus reducing shares outstanding, and increasing the price of the shares that remain), rather than pay it out as a dividend. The former results in a capital gain, which presently in the US is taxed as low as 15%, while the latter counts as ordinary income. Many companies do stock repurchases, sometimes in addition to dividends: Intel and Microsoft for example. This is another perfectly legitimate way to give money back to the investors.