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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."
when a company's main goal is to be acquired as soon as possible?
That's not Picasso, that's Kandinsky!
Jerry Yang was never meant to be Yahoo's CEO.
He took ever when Terry Semel took a gigantic shit on the company. He failed to act on Yang's and Filo's suggestion that Yahoo acquire Google when that was still possible. This was when they were still using PageRank, prior to their major search engine acquisitions. I rememnber at the time that this was going on, I was constantly talking to Yahoo people about how much sense it made for them to do so. I also remember the looks on their faces when they all came back with "Semel's not going to do it." He also amassed a private fortune at the company's expense while letting Yahoo go down the drain.
They kicked him to the curb and fell back on Yang as interim CEO. He finally stuck to the position when it looked like that was all that would keep the shareholders happy. But it was simply never supposed to happen.
If I blame Yang for anything, it's for ever letting Semel head the company in the first place.
No- because investors today think the stock price means everything. Played that way, the entire thing is a giant pyramid scheme waiting to collape... oh too late.
I still have more fans than freaks. WTF is wrong with you people?
Can't watch video since I'm on a machine without flash (or sound for that matter), but it's Schiff.
So he'll be pointing out that the US economy is fake, that it's all borrow and consume, and the US dollar is set to drop by a huge amount. And hence you should invest all your money overseas, via his firm of course.
He's basically right in principal, though I think he underestimates just how badly the US bursting will hurt the rest of the world, and he doesn't seem to notice that the US housing bubble is a dwarf compared with the UK... On Asia he's probably right, for the end game anyway.
Owning "growth" stocks that pay no dividends is gambling pure and simple. See Enron for how easy it is to create phantom earnings - it's a little harder to do so when you have to pay that dividend out... But that isn't US specific.
I would expect Schiff to not have any huge problems with US miners (of all sorts), US agriculture, and US oil companies. He does have the reverse of the norm view that the US has more "government risk" than other countries.
As in the US is more likely to declare a "windfall profit tax" and steal your dividends when those companies do very well as the domestic economy collapses or to simply confiscate your gold, etc than say China is. The really sad thing is that he's probably right on that one...
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.
Or basically dividends allow your investors the option to take part of your profits and either put them back into the stock or use them for income or other purposes.
One symptom the lack of dividends leads to is companies feeling compelled to branch out in order to make use of the money they have on hand; they usually aren't as good at their new tacked-on field, and the formerly well-focused company that the investors bought into no longer exists.
I know Jerry and he is smart and insightful, but way too nice to be a CEO in an industry where he has to compete against SOBs like Ballmer and Schmidt. Jerry is polite and considerate. He is thoughtful and modest. The other guys are rude, arrogant, aggressive, nasty folk.
Jerry did a lot of useful changes, but what he didn't get that it is all about perception of being a leader and being on the path upward. A lot of the issue for the market is PR versus reality. And, let face it, search and search advertising are the things the market views as keys to future success and Yahoo has fallen further behind in this area. The decision to outsource search to Google by Yahoo may prove to be one of the top 5 greatest business mistakes of all time and Jerry has to share blame for that as well.
Jerry didn't move boldly enough, but his Board should have known that his base style wouldn't allow it. He should have reorg'ed immediately and publicly, giving folks ownership and accountability. You get the job but you get fired if you don't hit the goals. He let key services stagnate. Yahoo mail took too long to fix their UI to match Google and Yahoo still charges for POP access. Yahoo was the calendar leader, but Google launches a slightly better calendar and is viewed as the leader, even without a customer base. Yahoo Groups is a leader but is old and stale compared to something like Ning. There are lots of examples of how to upgrade their services out there for Yahoo and they seem to ignore them and let others steal mind share and leadership from them.
I fear that it is too late. Yahoo is the AOL of Web 2.0. It is only a matter of time.