Yahoo: Fighting for Its Life, Uses Homepage To Battle Icahn

Yahoo (YHOO) is pulling out its biggest gun in the showdown with Carl Icahn: the Yahoo homepage itself. Right now on Yahoo.com, the single most-visited page on the Web (with 304 million unique visitors worldwide in May, according to comScore), there is a big purple button the third box down aimed squarely at Yahoo shareholders. The button takes people to this page where Yahoo outlines its argument against investor Carl Icahn, who wants to replace Yahoo’s board, fire Jerry Yang, and then restart negotiations with Microsoft (MSFT) (an effort that is not going so well).

Yahoo is in a battle for its life, and it is using the reach of its homepage as a weapon in its proxy battle against Icahn. It is trying to persuade every single Yahoo shareholder to vote against Icahn’s proposal to replace Yahoo’s board. Yahoo is going straight for Icahn, attacking his credibility as an investor. At the top of the “proxy facts” page that the button takes you to there is the following quote:

 

“It’s hard to understand these technology companies.”* – Carl Icahn

 

Then Yahoo reproduces one of the slides that it filed with the SEC at the end of June, which shows Icahn’s dismal track record recently as an investor (which is an easy trick in this market):

All Yahoo has to do to defeat Icahn is convince a majority of voting shareholders that he is wrong and not qualified to control the fate of the company via his hand-picked board. Taking the battle to the homepage shows how close it may turn out to be. Every single vote counts, and Yahoo is not shy about using its Web real estate to put up a sign arguing its case. It doesn’t say much for the editorial independence/neutrality of the homepage, but when you are fighting for your life those sorts of considerations are thrown out the window. (Click images to enlarge.)

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[blah-blah]

Nice desperation move

A win for Yang would just signal CEOs that they can drive their company into the ground feeding their ego all the way and get away with it.

[hw2h]

It is a really fight. Early days, Yahoo is using Google technology, and then Microsoft use Yahoo's. And since it is free, Search is an area that Microsoft cannot compete by lowering price, though it is doing cash back search now (we shall see)

[StrictNon-Conformist]

It's really rather comical: all the pundits screaming how desperate Yahoo! is to use their webpage to detail their position, when in reality, it shows simple reasonable logic: it demonstrates how much reach they have in terms of audiences, and that they're not without a lot of value. 304 million unique viewers for that page??? That's more than the whole US population! And... well, not everyone in the US is online, so that says a lot about how many people it reaches that may be useful for it to reach. Now, whether or not it'll have the desired effect is incredibly hard to judge, even if it is truly successful: there's so many other places online as well as just listening/watching news offline that's going on and on about the whole thing that it makes accurate attribution of effects effectively impossible.

Now, as to the Search thing referred to by hw2h: Microsoft can, in fact, lower the price for those that are paying the bills: the advertisers. They have, in fact (in a limited manner) lowered the price for searchers with their recent promotion (do you know what that promotion is? Search for it! :) ) but if people don't want to use it, even for free, or even when paid to use it, it's purely a liability on the balance sheet, as it has been almost the entire time, and the losses are only getting bigger. If advertisers don't get results, why bother with them? Microsoft doesn't have the volume of either Yahoo! or Google, and therefore can't get the results advertisers want, and therefore can't get the advertisers Microsoft wants, and it seems users rarely use it, so as a side-effect of that, the search results are going to be subpar, and not give the users of Search what they want, and... nobody gets what they want, so the value proposition is in the crapper for all parties involved. Hence, Microsoft wanting and needing to buy Yahoo! to achieve critical mass. Yahoo! has the numbers, and while not as profitable as Google at this time, is at least profitable, while Microsoft's online properties have only had a single quarter where they were in the black, and every other quarter has seen massive losses for all the years.

Either Microsoft needs to complete the deal, or they'd be wiser financially to work on other things, if they're not going to make it grow into profitability. You can't simply increase profitability long-term by taking on more and more losses for a long time, if you're not actually growing customer base to where they'll eventually pay off. It seems Microsoft is simply not growing Search user or Search advertiser customer base towards profitability, and both need to be synchronized for the bottom line: if you don't have searchers, you can't get much for advertising, but if you don't have advertising that's effective, you may not get as many searchers, and without enough searchers, there's less complete detail as to what people are searching for: this completes the vicious cycle.

[User 228422]

Still not sure why this is called an 'ego move' by Jerry Yang... how often does a CEO get just one year to go back to a company he started before he is forced out by the masses? At least give him 2-3 years before you jump to a conclusion

[jackooo]

Forgot Icahn's TWA. Net worth equaled bankruptcy.