Yahoo's Jerry Yang Needs To Get On With It

By all accounts Yahoo's Jerry Yang is a nice guy. But he is beginning to bug me, especially with his latest "Dear Steve" note to Microsoft's Steve Ballmer.

Purportedly a calm and rational letter laying out why Yahoo continues to reject Microsoft's acquisition-related entreaties, it is mischievous and irritating. The note is replete with cute stuff and homespun dealmaking ditziness, all running over top of that Yang-ian "i love lower-case" faux familiarity.

Granted, there is no "sent from a Blackberry" lower case this time around, but there is that opening "Dear Steve." Why the we're-just-dealmaking-buds tone? In part because that's one of Yang's embarrassing tropes. He wants to seem warm and personal to his Yahooligans, a combination of Yahoo's founder and its curator, not some Microsoft-style power-mad CEO presiding over a company of fawning minions.

The trouble is, Yang is Yahoo's CEO, and this isn't about who's friends with whom in the techie schoolyard. Microsoft wants to buy his company, and while such discussions can get personal, Yang seeming more warm and cuddly than Steve Ballmer is a) not hard, and b) irrelevant and offensive. And to twist Ballmer's words on what does or does not constitute productive negotiations, as Yang does, puts the lie to the rest of Yang's happy-talk.

Nevertheless, the content of Yang's letter, most of which, unlike the tail-wagging salutation, was likely pushed on him by the board, makes clear a few things:

• Yahoo is ready to do a deal ["open to all alternative"]
• It wants more cash in the deal, or at least a higher floor on the price [that's the "more certainty" part of the note]
• It would like a higher price [the poorly worded "at a value that fully reflects the value"]

The sooner Yang stops trying to be a kinder, gentler CEO, and just gets on with getting this deal figured out -- which the above points make clear his company wants to do -- the better.

Comments

[iBeleive:]

Mr. Yang better get off his high horse and think of the stockholders for once. Lawsuits could be headed his way and towards YAHOO if we lose our shorts due to his foolish hardball games. Very egotistical which doesn't hold much weight in these hard times. Get Smart Yang and make a deal before you face some real music........

2008 Apr 07 06:01 PM

[Robert DiAl...:]

It is embarassing to see Yahoo try to squeeze more money when they are weak. Their stock was in the dumper and they get a great offer adn want to play games. You may cost your shareholders money for your big ego Jerry.

2008 Apr 07 06:09 PM

[Smart Look:]

I agree he's a nice guy. I truly believe he is caught in something bigger than he understands. Semel would have understood by this point that the deal needs to be done.
It's tough to say goodbye to your baby.
He needs to hug the kid and send it off.

2008 Apr 07 07:37 PM

[oceandude:]

So basically you want leadership out of Jerry Yang?

Good luck with that.

2008 Apr 07 07:46 PM

[fred4dot:]

Personally, as both a YHOO and MSFT shareholder, I agree that Yahoo is worth more than Microsoft is offering. When the market as a whole is really in the dumper, it's a buyers market, and it makes good business sense to try to "make a steal of a deal" on the best asset you can, but that does not mean Yahoo has to sell. Those of you who think Yahoo is only worth what the market says can sell your shares at any time. $27 is a lot better than $19; but $31 is not very good if the real value is $40 or so (What Microsoft thought it was worth less than a year ago in a higher market).

Fortunes are made and lost because one thinks it is time to sell and one thinks it is time to buy. Not both can be right.

Both CEOs are right. Yahoo is a steal for Microsoft at $50 a share because they have never been able to do what Yahoo is great at doing (and need to have that in their business plan) and as a Microsoft shareholder, I hope they can buy YHOO for maybe even $25 a share. BUT as a Yahoo shareholder, I think Microsoft was closer to a correct value when they offered $40. With current market and economy conditions, I think $35 is probably a fair price, but I'm not sure it is full value and I'm not convinced that Yahoo needs to sell itself. No other company does what Yahoo does so well, if they did, why is Yahoo still the page view leader?

2008 Apr 08 12:14 PM

[Mike@Yahoo:]

Everyone seems to forget Yahoo! employees are stockholders too... and discount us as a group, as a force and as relevant.

It's the investment bankers and bean-counters who are urging for Yang and Yahoo! to rollover and act defenseless. Fine. But don't couch this as what "stockholders" think is "best for the company".

You're interested only in short-term payoffs for your investments. Just say it out loud for a change. Yahoo! employees- of which I am one- are still 12,000 strong worldwide. We have a culture a lifestyle and a drive to succeed that people who punch the clock will never know, nor understand. We will never vote to join Microsoft. Ballmer and his minions will never be welcome.

Yang's approach seems odd to you, most likely, because your life is based on continuous disingenuous business-speak disguised to hide what you really mean. Yang's voice is our voice. If you can't hear it properly then listen closely: We don't want an arranged marriage, we will resist at every corner, even if it means shacking up with somenone else. The major stockholders will never get our loyalty.
It already belongs to the greatest company in the world and it's visionary leader...not a pack of financial dogs sniffing each other's behinds hoping to catch a whiff of some new money-making opportunity.

2008 Apr 08 01:41 PM