[Posted on March 14, 2008 - 5:11 PM]
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What a puff of air from the San Francisco Chronicle about Yahoo! Inc. [YHOO] co-founder and CEO Jerry Yang. The story, ostensibly an analysis of Yang's skills as a chief executive and negotiator, mostly rehashes what's already known regarding his public image, along with the entrepreneur's well-chronicled rise to fortune. It also dispenses wisdom such as, "Yang's abilities as a dealmaker
could weigh heavily in determining Yahoo's fate. Either decision - to
stay independent or join forces with another company - will require
intense bargaining."Let me get this straight. You mean a CEO's ability to negotiate a deal to be acquired "could" (not "will," mind you) affect the company's future? And deciding whether to agree to a deal or go it alone will (bravo), in fact, require vigorous negotiation? Okay, if they say so.
Another nugget, courtesy of a former Yahoo! exec speaking about Yang's strengths at the bargaining table: "He always wanted to get the best deal for the company." Man, he is good! Meanwhile, while noting that over his career at Yahoo! Yang let other executives manage the company except "for a few weeks at the helm early on," the story highlights his abilities as a deal closer. Huh?
Fair enough for the Chronicle, a good newspaper, to address Yang's abilities as a dealmaker. And with the news business today a round-the-clock affair, media companies, including this one, publish plenty of material unlikely ever to contend for a Pulitzer--one widely ignored byproduct of online journalism is that many overworked journos scrambling to fill Web sites with digital "content" have less time to focus on traditional reporting. And, you know, thinking.
But this piece is worse than merely confused because it obscures what is perhaps most salient regarding Yang's duel with Microsoft Corp. [MSFT] CEO Steve Ballmer: Jerry's negotiating skills are largely irrelevant. Why? Because Redmond is running the show. No other bidders have surfaced for Yahoo!, let alone actually made a counter-bid to Microsoft's gargantuan offer, which means Yang has little leverage with which to negotiate. And what he will almost certainly be negotiating isn't whether to merge with Microsoft, but at what price, which will focus on prying a few more coins out of Ballmer's iron fist. Meanwhile, to date Yahoo!'s trial balloons floated to explore deals with Google Inc., [GOOG] News Corp. [NWS] and Time Warner Inc. [TWX] have gone strictly nowhere, other than into the occasional headline.
It's also worth noting that investors only appear interested in Yang's M&A prowess as it concerns a single deal: Microsoft's. Yahoo! has made a number of acquisitions since he returned as CEO last June, including e-mail technology firm Zimbra Inc. for $350 million, behavioral ad specialist BlueLithium Inc. for $300 million, college sports site Rivals.com for $100 million and online video platform Maven Networks Inc. for $160 million, along with numerous strategic alliances.
Are such transactions evidence of Yang's chops as a dealmaker? Could be. But if so Wall Street's not interested. That's why Yahoo! shares, which closed at $28.12 on June 18 the day that Yang re-took the throne, have since remained flat, with many analysts predicting that the stock would plunge if Microsoft withdrew its offer.
The truth is that Yang's negotiating skills probably matter far less than his ability to keep employees, and shareholders, from abandoning what looks like an increasingly leaky, rudderless ship - Alain Sherter
See March 14 story from San Francisco Chronicle
See September 2007 story from TheDeal.com
For more see BoomTown, SearchEngineWatch, BloggingStocks and paidContent
