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Why Yahoo and Marissa Mayer's Over Reliance On Alibaba Could Spell Trouble

Posted by Unknown on from the zombie-yahoo-wants-your-ad-channels dept.

DavidGilbert99 writes "Marissa Mayer has been in charge at Yahoo for one year now. In that time she has seen the share price rise 70% and she's made some headline grabbing acquisitions — notably Tumblr for over $1 billion last month. However, look beneath the surface and things are not going so well. In this week's quarterly results, we saw ad sales fell by 12% year-on-year and as Alistair Charlton says in IBTimes UK: ' Yahoo earned $846m in cash by redeeming its shares in the group, representing a significant chunk of Yahoo's $1.07bn revenue for the quarter, down 1% on last year. ... The next few years will be a balancing act as the stabilizing wheels are removed and Yahoo, with dozens of acquired startups patching up the rust, will have to make progress under its own steam.'"

59 of 91 comments (clear)

  1. Income source by schneidafunk · · Score: 4, Interesting

    What exactly does Yahoo sell? Do they even have a mission statement? Personally I do not understand why they didn't sell to Microsoft when they had the chance.

    --
    Some people die at 25 and aren't buried until 75. -Benjamin Franklin
    1. Re:Income source by plover · · Score: 3, Insightful

      Advertising revenue and fees for operating online stores, as far as I can tell. They probably sell business intelligence data from their tracking efforts, too.

      --
      John
    2. Re:Income source by Anonymous Coward · · Score: 4, Insightful

      Ads. The same Google sells and Microsoft's Bing group sells. Yahoo is behind in the game, but the balance can change very quickly. The reason for that being that in the end it's about how much traffic you get and social network effects can make traffic grow or shrink at an exponential rate.

    3. Re:Income source by xxxJonBoyxxx · · Score: 4, Insightful

      >> What exactly does Yahoo sell?

      As a Yahoo webmail user, it appears that they sell an annoying little ad that looks just like an email entry and gets inserted into your list of emails. When people click on it (I've done it myself a couple of times by accident), some stupid mark gets charged and the clicker makes a mental note to never buy anything from that advertiser again.

    4. Re:Income source by alen · · Score: 1

      they used to be where you go for news, but lots of start ups have taken over this function. AOL and a few other big companies host most of the internet's big blogs

    5. Re:Income source by Minwee · · Score: 4, Funny

      What exactly does Yahoo sell?

      Yahoo! Sells! Exclamation! Marks!

    6. Re:Income source by formfeed · · Score: 1

      they used to be where you go for news, but lots of start ups have taken over this function. AOL and a few other big companies host most of the internet's big blogs

      But if start pages, web-portals, and animated gifs ever become popular again they will be there first.

    7. Re:Income source by Anonymous Coward · · Score: 1

      Apparently they sell ads. They increase their number of ad views by making their most useful offerings more confusing and hard to use, like Yahoo News. This makes more people add comments to news stories trying to tell Yahoo how badly they're screwing up, which means more ad views as comments make the extra page views to enter a comment.

    8. Re:Income source by alen · · Score: 1

      you would be surprised how many sites AOL owns. none of them use the AOL brand name to make the idiot internet cool people think they aren't dealing with AOL because its not cool

    9. Re:Income source by GodfatherofSoul · · Score: 3, Interesting

      Welcome to Wall Street 2100, the sequel. I watched a pretty good panel discussion about the subtle change in our financial sector from investment- to trader-focused. People aren't worried about profit or fundamentals or products. Companies aren't even trying to sell themselves to the individual investor anymore since it's all about the big boys slinging massive HFTs. It's about how your stock is playing in the market. I always wondered how so many ubersmart people could be duped by Enron. The reality is, they weren't. They just didn't care so long as the checks continued to clear.

      --
      I swear to God...I swear to God! That is NOT how you treat your human!
    10. Re:Income source by interval1066 · · Score: 1

      Yahoo was doing quite well with its shitty search engine until Google came along. I still remember the tv ads they used to run. Funny how technology tends to surpass your best efforts.

      --
      Python: 'And then suddenly you have a language which says "we're all stuck with whatever the whiniest coder wants".'
    11. Re:Income source by Anonymous Coward · · Score: 2, Interesting

      I came here for extremely sexist, demeaning, and true comments about their CEO taking on the burden of viewing the world completely different than she did before she was hired and immediately had her hormones and priorities flipped over by a new baby. Seriously, I've known many women who have gone from the care-free life of an American spoiled brat to a mother who had to make real life decisions. They simply don't give a shit about the stuff they cared about before baby--no way around it. She is collecting her check and living life--Yahoo should get a new CEO.

    12. Re:Income source by lgw · · Score: 1

      Yahoo has been 90% "the Alibaba holding company" for so long now I have to wonder if they know what they sell.

      --
      Socialism: a lie told by totalitarians and believed by fools.
    13. Re:Income source by NatasRevol · · Score: 1

      I don't know what Yahoo sells today.

      But come October, I imagine they'll be selling lots of google.com/ig replacement impressions.

      http://en.wikipedia.org/wiki/IGoogle#Decommission

      --
      There are two types of people in the world: Those who crave closure
    14. Re:Income source by Anonymous Coward · · Score: 2, Insightful

      Given that the previous CEOs were much worse than her, I would say your advice is shit.

      Can she give Yahoo some new life ? I seriously doubt it. They lack technology "top guns" (superstart developers). Their search engine is outsourced to MS and it is frankly shite.

      What she could do is to take Android phones and try to innovate and differentiate. Maybe less built-in, dragnet spying ? Maybe "due process, rule of law" and so on ? But I am sure she is too much immeresed into the GoogleNSAplex to use this massive opportunity.

      But let's dream for a few seconds: Whatabout making a fully encrypted YahooDroid ? Government only gets access after performing twenty CPU hours of workload. That would still allow for Law enforcement to get access (they can force yahoo to provide them access), for SPECIFIC devices as opposed to "let's suck in the data of 1000 million Android users and store it forever".

      But then, Mayer is already part of the ruling classes and what they want is as much control as they can get. They want to shaft the little guy to further their insane ambitions. That will do it for yahoo, as the world needs only one GooNSA.

    15. Re:Income source by genericmk · · Score: 1

      Yahoo sells you. My wife works in advertising and marketing and Yahoo sells them user profiles for targeting ads and focusing their efforts.

    16. Re:Income source by ArhcAngel · · Score: 2

      Switched to Yahoo webmail a month after Microsoft bought Hotmail. I eventually opted to pay the $20 a year to get rid of the ads. I don't miss the $20 and not having every email tagged with Do You Yahoo or any ads is well worth the costs. I have a Gmail account but rarely use it for email.

      --
      "A person is smart. People are dumb, panicky dangerous animals and you know it." - K
    17. Re:Income source by ArhcAngel · · Score: 1

      you would be surprised how many sites AOL owns.

      Not if he's been here.

      --
      "A person is smart. People are dumb, panicky dangerous animals and you know it." - K
    18. Re:Income source by ciotog · · Score: 1

      The company where I work uses their BOSS Geo service, which costs us about $20-100 per month depending on what marketing campaigns are being done.

  2. Yahoo! Mission Statement by eldavojohn · · Score: 5, Funny

    What exactly does Yahoo sell? Do they even have a mission statement?

    From several investor calls she has said:

    “Yahoo is about making the world’s daily habits more inspiring and entertaining,”

    Which is a little more positive and slightly better than Yahoo!'s previous mission statement:

    "Now open up all your little fucking birdie mouths because Papa Yahoo!'s got a big juicy unwanted browser toolbar to slam down your goddamn throats."

    --
    My work here is dung.
    1. Re:Yahoo! Mission Statement by Squidlips · · Score: 1

      They must have used the Dilbert Mission Statement generator

    2. Re:Yahoo! Mission Statement by MysteriousPreacher · · Score: 2

      âoeYahoo is about making the worldâ(TM)s daily habits more inspiring and entertaining,â

      Interesting articles printed on toilet roll? Holidays that take themselves? Little toy dogs that can bark my name? A help page that isn't a compendium of broken or misleading links?

      --
      -- Using the preview button since 2005
    3. Re:Yahoo! Mission Statement by mrspoonsi · · Score: 1

      Except: “Yahoo is about making the world’s daily habits more inspiring and entertaining,” Really means "Yahoo is about making the world’s daily habits more inspiring and entertaining, with our great browser toolbar"

  3. Confusing luck with talent by Anonymous Coward · · Score: 5, Insightful

    Most of those "superstar" business executives are no better than their college classmates. They just happened to land in the right company at the right time.

    I don't believe that Mayer has CEO super powers. She was lucky to have worked at Google at a time when it was poised to take off. Putting her in charge of a wounded beast like Yahoo is a completely different ball game though. I don't know that she actually has the chops to handle that kind of situation.

    The problem with Yahoo is that it's an aimless company. Essentially an answer to a question nobody asked. Everything that used to make Yahoo special, somebody else now does better. They either get back on top in search (unlikely) or find something new to excel at.

    1. Re:Confusing luck with talent by Pinky's+Brain · · Score: 2

      Here's a different idea ... they slim the fuck down to focus on the parts of the business turning a profit and liquidate assets not to pay beyond market price for startups but simply to pay dividends to shareholders. Let those shareholders find new uses for the money, of course then Yahoo would be a small company and Mayer would be grossly overpaid ...

      Shareholder diligence doesn't exist any more, the lunatics are running the asylum.

    2. Re:Confusing luck with talent by TheRaven64 · · Score: 4, Interesting

      There's an old stock market scam. You open 100 accounts. You invest randomly. After a week, roughly half will be turning a profit. You close the ones that aren't, and do another round of random investing. Again, roughly half make a loss, half a profit. After a few rounds of this, you have lost quite a lot of money, but you have one account that looks really stellar - huge returns on investment. You then open this up to investment, with the disclaimer that past performance does not guarantee future results, and wait for the money to roll in (you can then invest this in your own companies, or just take it and run away).

      Much the same applies with CEOs. You take a few thousand business graduates each year and put them in management positions. They all make random decisions. Then you cherry pick the handful that have made decisions that turned out well. Then you say 'Superstar CEO, please pay enormous salary'.

      --
      I am TheRaven on Soylent News
    3. Re:Confusing luck with talent by alen · · Score: 1

      not like google just grew magically

      there were a lot of decisions to be made over the years

    4. Re:Confusing luck with talent by korbulon · · Score: 1

      If I had mod points, I would mod parent up. Nice brief summary of what's happening here. The Google aura has begun to wear off, and now the cracks start to appear.

    5. Re:Confusing luck with talent by Anonymous Coward · · Score: 2, Insightful

      A proven track record of what? She was at Google when Google did extraordinarily well. Correlation doesn't equal causation. Using your criteria, until 2000 Steve Ballmer also had a "proven track record in industry".

      If she had taken 3 companies to the height Google went to (or even half of that) she would have a "track record". Until she's done that all she had was wither the good sense or the dumb luck to join Google when she did.

    6. Re:Confusing luck with talent by hdas · · Score: 2

      Congratulations, you discovered an important machine learning meta-algorithm: http://en.wikipedia.org/wiki/Weighted_Majority_Algorithm.

    7. Re:Confusing luck with talent by jeffmflanagan · · Score: 2

      I agree with you, but isn't it the shareholder's fault if they're holding stock in a company that doesn't care about them? If they're not happy about Yahoo's lack of focus or a plan, they should sell before the stock crashes.

    8. Re:Confusing luck with talent by alen · · Score: 1

      google started in 1997, not 1986 like microsoft. there is a huge difference in running a company from start up to peak profit growth than from peak profit growth to maintaining market share

      in fact i think that google and apple are right about where MS was in 2000. the fast growth is over, lots of employees have been hired compared to the fast growth phase and going forward its going to be a lot of internal politics

      google is a lot like MS in that a few money making parts like advertising support a lot of cash burning projects

    9. Re:Confusing luck with talent by datavirtue · · Score: 1

      slim the fuck down to focus on the parts of the business turning a profit

      That is what companies or professional managers would normally do if they had a solid fundamental business. Yahoo is.....I don't know what it is but a website with tons of residual accounts and users who are not cool. It reminds me of AOL and it will be around for a long time due to the accumulation of certain assets. Assets are not a business though. Sell.

      --
      I object to power without constructive purpose. --Spock
    10. Re:Confusing luck with talent by datavirtue · · Score: 1

      going forward its going to be a lot of internal politics

      Don't say that, I'm about to join a maturing start-up.

      --
      I object to power without constructive purpose. --Spock
    11. Re:Confusing luck with talent by phantomfive · · Score: 1

      I don't believe that Mayer has CEO super powers. She was lucky to have worked at Google at a time when it was poised to take off.

      That, and she works really, really hard. Like the quote from this story:

      "For my first five years at Google, I pulled an all-nighter every week," Mayer said in a recent talk at New York's 92Y cultural center. "It was a lot of hard work."

      It doesn't matter what you're doing, if you're working that hard, and actually make it productive, you're going to get better. If I spent an all-nighter every week, and actually made it productive, I would be really, really good at programming right now.

      --
      "First they came for the slanderers and i said nothing."
    12. Re:Confusing luck with talent by wisnoskij · · Score: 1

      Is this evidence of either? It sounds like Yahoo is continuing its downwards spiral to obsolescence.

      --
      Troll is not a replacement for I disagree.
    13. Re:Confusing luck with talent by alen · · Score: 1

      and yahoo has a tiny fraction of the revenue of google and MS. apple was almost like a start up from 1997 through 2012

      yahoo might not be a start up but its pretty close where she can get it turned around

    14. Re:Confusing luck with talent by DerekLyons · · Score: 1

      If they're not happy about Yahoo's lack of focus or a plan, they should sell before the stock crashes.

      Which is why I didn't buy GOOG.

    15. Re:Confusing luck with talent by Pinky's+Brain · · Score: 1

      The people holding the shares during the AGM should vote ... when people simply bounce stocks around we get the current situation, where once great companies with large reserves of money, assets and good will become vehicles for self-enrichment of management as they perform a decade long nosedive.

    16. Re:Confusing luck with talent by rioki · · Score: 1

      Bwa ha ha ha ha ha ha! Funny that you say that. Since I can attribute to the opposite. True, it "takes 1000 hours" to get good at anything. But you have a limited mental capacity and when you exceed this capacity you are actually reducing your quality of work and learning.

      Since the mid 19th century you will find numerous studies about worktime / overtime affect on productivity and all of them indicate that the more you work above something around 30-40h the less you get done. That is not less for the hour, but less in total; so at 35h you more done than 60h weeks.

      And if you think about it, it makes sense. So you where able to pull an all nighter, not only did you probably make more mistakes at 3am, but also now you are tired as hell and can't think straight. All morning you try to concentrate and basically just sleep-work (as in sleep walk) thought the day. Now compare that with being well rested and focused. Sure you don't have that many hours of work, but you spend each hour highly concentrated. You get more done, it just does not feel so heroic when you get the solution right the first time instead of fixing bugs all night.

      I for myself have reduced my contract to "part time" and work 4 days 8h. I am regarded as one of the best / productive developers on my team and that was one of the reasons why my PL had no problem with that. But maybe, just maybe it is just that, at some point in my career I learned that working "harder" does exactly nothing, but "smarter" is most part enabling to really concentrate on the job.

    17. Re:Confusing luck with talent by pnutjam · · Score: 1

      The problem is that people think our system is capitalism, as in the capital owner runs the show, unfortunately it is managementism, as in the managers take what they want and dump the rest on the owners (who have no say beyond non-binding votes).

      --
      Cheap storage VM.
  4. Wasn't really her doing by Anonymous Coward · · Score: 1

    In that time she has seen the share price rise 70% and she's made some headline grabbing acquisitions...

    That's just people's expectations and hopes. Meaning, any increases in revenue from those purchases has already been factored into the price and if the targets aren't meant, the stock will just go down.

    OTOH, if things turn out better than expected, then there may be more upside.

    I think all those purchases are going to bite her in the ass.

  5. Duh... by Anonymous Coward · · Score: 5, Interesting

    They've existed by cashing out their own property ever since she came on board. It's corporate cannibalism designed to make her look great at the expense of the company and its employees.... yet she is lauded as the second coming of Joan of Arc or something. The next few years will see her jump ship just before the company takes yet another nosedive, which will probably be attributed to her loss of leadership. It's fucking disgusting to anyone who is paying attention.

    1. Re:Duh... by cmorriss · · Score: 2

      Not that I think Mayer is any good as a CEO, but this entire article is based on the premise that most of their revenue in the second quarter was from selling off an investment which is false. The $1.07 billion in revenue is completely separate from the investment gain from Alibaba. Investment gains like that are never counted as revenue.

      See official quarterly results for more details: http://finance.yahoo.com/news/yahoo-reports-second-quarter-2013-200500159.html

      --
      10 minutes working on a sig. What a waste.
  6. selling shares is not revenue by alen · · Score: 2

    there is no way this is legal to report in the USA as revenue

    1. Re:selling shares is not revenue by H0p313ss · · Score: 2

      there is no way this is legal to report in the USA as revenue

      > Yahoo earned $846m in cash by redeeming its shares in the group, representing a significant chunk of Yahoo's $1.07bn revenue for the quarter

      It's income from investment, it should be in a different line from other forms of revenue in the quarterly statement.

      --
      XML is a known as a key material required to create SMD: Software of Mass Destruction
    2. Re:selling shares is not revenue by cmorriss · · Score: 1

      It is NOT reported as revenue. TFA and summary are wrong. If you want the details: http://finance.yahoo.com/news/yahoo-reports-second-quarter-2013-200500159.html

      Yahoo! reported $1.07 billion in revenue without including the gain from Alibaba. The whole article makes little sense and the summary plays up a small piece from the article that isn't even correct. This should never have made it onto Slashdot.

      --
      10 minutes working on a sig. What a waste.
    3. Re:selling shares is not revenue by LearningHard · · Score: 1

      It isn't. Under GAAP it would be reported as an increase in Cash and Stockholder's Equity. Would never touch the income statement.
      source: I worked 3 years doing revenue recognition. Plus this is a basic thing covered in accounting 101 under the accounting identity (Assets = Liabilities + Stockholder's Equity).

    4. Re:selling shares is not revenue by H0p313ss · · Score: 1

      Yahoo financials are here.
      2013 second quarter is here

      Note that under assets in the balance sheet there is a line item for "Investments in equity interests"

      And that in the statement of income there is a line item quite separate from income for operations: "Earnings in equity interests"

      It's all very clearly laid out if you bother to do your homework.

      And yes there will be a quiz this week.

      --
      XML is a known as a key material required to create SMD: Software of Mass Destruction
  7. Gp is right by Anonymous Coward · · Score: 1

    Mayer has a proven track record in industry, what do you have exactly?

    I just flipped 10 heads in a row, do I have a "proven" track record?

    And judging by her acquisitions, her strategy seems to be "throw a lot of money around and see what works."

    You want an example of great CEO leadership? Go back and see what Lou Gerstner did to IBM in the 90s - THAT is how it's done.

  8. Not all is lost. by formfeed · · Score: 3, Insightful

    Slashdot apparently still has a special icon for Yahoo stories

    Which can only mean one of two things:
    (1) Yahoo still is very cool, hip, and totally in.
    or (2) /. isn't

    1. Re:Not all is lost. by kelemvor4 · · Score: 1

      Slashdot apparently still has a special icon for Yahoo stories

      Which can only mean one of two things: (1) Yahoo still is very cool, hip, and totally in. or (2) /. isn't

      News flash. Slashdot never really has been any of those things. It's further away than ever now that Dice bought it.

      But, I have to ask... Icons? What you talkin' bout, Willis?

    2. Re:Not all is lost. by another+random+user · · Score: 1

      But, I have to ask... Icons? What you talkin' bout, Willis?

      http://slashdot.org/topics.pl

      --
      -1 troll is not supposed to be used simply because you don't agree
    3. Re:Not all is lost. by Anonymous Coward · · Score: 1

      Who the fuck not still going through puberty worries about stupid, irrelevant shit like what some idiots think is cool or hip?

  9. Re:Alibaba, really? by EvilSS · · Score: 1

    It's a B2B site for (mostly) Asian suppliers. While there is a lot of junk on there it is a legit site. For example: need a few dozen tons of rice?

    --
    I browse on +1 so AC's need not respond, I won't see it.
  10. That is a time-honored tactic by mveloso · · Score: 2

    Apple used to do that all the time back in the day, before they started doing well. They used to sell shares of ARM to keep themselves afloat. In fact, there's an article about it, so I don't have to rely on my faulty memory.

    http://www.cultofmac.com/97055/this-is-how-arm-saved-apple-from-going-bust-1990s/

  11. yahoo news by bugs2squash · · Score: 1

    yahoo news seems to have lurched to the right. It was probably fairly left-tilting before but now it seems to feature endless stories on the imaginary atrocities of obamacare, "truths" from the blaze etc. And there are quite a few ads posing like news stories that were not there before.

    --
    Nullius in verba
  12. Alibaba and the 40 Thieves by frovingslosh · · Score: 1

    There are plenty of sellers on there at least representing themselves as selling single units or low quantities directly to U.S consumers.

    --
    I'm an American. I love this country and the freedoms that we used to have.
  13. The 40 thieves... by unixisc · · Score: 1

    ....are the reason that it would spell trouble