Yang to Yahoos: Keep the Faith


Blodget has a good summary of Jerry Yang’s Yahoo note to the troops articulating the reasons for the rejection of Microsoft’s offer and the company’s future plans.    He gives Yang an A- but I think this might be generous.  

I’m wondering if Yahoo didn’t fail recently, rather years ago when many lines of separation were drawn between technologists and most of the company management.  I assume there were official lines drawn, but I’m talking more in terms of culture here.     My bullishness about Yahoo has rested on the assumption that the technologists would eventually have their day and as with Google would create the tools necessary to keep Yahoo competitive and interface with the broader developer community as Google has done so effectively to bring more awareness and use of Yahoo tools, effectively widening their footprint over the internet landscape.  

I no longer thing there is enough technological empowerment at Yahoo to make this likely anytime soon.   It will take a LOT more than peppy emails and a combative stance here.  Recent defections from Yahoo suggest that even internally Yahoos are more bullish on Google than their own company.   

So, if we assume Yahoo’s got to do something really big is Microsoft or News Corp the best fit.    From Yahoo’s perspective clearly they’d love it if News Corp was willing to pony up as much as MS, and frankly this seems like a more likely winning combination than MS and Yahoo which would have a lot of initial, and perhaps long term, contentiousness.   Fox Interactive is run brilliantly, and applying these management principles to Yahoo could do a world of good to the bottom line of the combined company.    As a Yahoo shareholder I’m rooting for that option though I’d predict MS will win this battle because of the difficulties News Corp will have showing how valuing Yahoo at 50 billion+  is justified given how difficult it may be to make a lot more money from the combined company in anything short of many years.

disclosure:  Long on Yahoo

Ted Conference or Bil Conference?


Bil Conference

Here at the blog I have noted before that I think the Ted conference has a pretty high elitist component, and although I’ve warmed to the idea that most of the speakers there have important things to say I’m still concerned that the TED and other expensive conference formats somehow create a lot of unintended biases and effectively censor people and content in a way that is akin to our problems with US politics where purchasing access to things trumps giving access to the maximum number of innovative and clever ideas and deserving people.

There is now an alternative UNconference called the Bil Conference, and to TEDs credit they appear to be supportive of this venue which will be just after and near the location of TED, but won’t cost to attend.

Of course *free* conferences can also suffer from the challenges of non-representativeness.    I do think the costs of transportation and lodging provide a barrier to entry that keeps out those who are just looking for a free lunch or to annoy people from the soap box provided by UNconferences to anyone who cares to speak.

I won’t be attending TED or Bil this year though I’ll be down there for MashupCamp later in March.   TED blog

Check your airline mileage program for major rule changes!


Over the years we fly several different airlines and if you are like us you have mileage programs for the family on each one. That makes tracking them hard enough, but rules appear to be changing as the airlines are squeezed by huge losses in an effort to reduce free flying. AA, for example, changed from a 36 month to 18 month expiration without account activity. It appears they didn’t bother to send a letter about this, though so far they restored miles to my account though I’m waiting to hear back on our three other accounts which collectively have more than one ticket worth of miles. I’m also having trouble with my US Air Account which appears to have expired miles as well, though in that case I was notified by them by email that was basically lost in the shuffle.

Let’s see if what response comes in from this:

Dear AA –

I am in a state of confusion about AAdvantage Dividend Miles for the family accounts. We don’t often fly AA because we live in a rural area not well served by AA, so our flights are every few years from big cities.

I called and they credited back miles I lost on my account, but accounts for my son, daughter, and wife appear to have lost the miles completely. We’d read on the last statement we have they “might expire in 36 months”, which would not have expired them yet. But when I called a few days ago I was told they expired a few months back after a change in the rules. I don’t think we were even notified of the change by mail or email as those accounts had no email addresses with them.

What am I asking for here? Simply that the miles be restored on the following accounts for another month or so so we can figure out what to do under the new rules, since we were under the impression they’d be fine until July 2008 based on the letters we have from AA:

(Account details omitted)
PS – l’ll be blogging this adventure at a travel blog I run, and would like permission to repost your replies, or if you prefer you can have a PR person

UPDATE: AA restored the miles and sent me this nice note. Thanks AA!:

Dear Mr. Hunkins:

Please accept my apology for the difficulty you encountered with the expiration of
your miles. We’re glad you took the time to write since it gives us the opportunity
to respond to your concern.

I have reviewed your account, as well as the accounts for your wife ***** ,
your son **** your daughter ***. As of today,
February 18, 2008, their accounts do show that their mileage has been restored (as
well as your account also has the mileage restored). Their mileage, as well as yours,
are in their accounts now, and you can view their accounts via AA.com at
http://www.aa.com/AAdvantage®.

Mr. Hunkins, we look forward to welcoming your family aboard soon. We very much
appreciate your family’s participation in our AAdvantage program.

Sincerely,

(name omitted)
Customer Relations
American Airlines

Yahoo Tech Ticker – Arrington on Yahoo


Yahoo’s got an interview with Mike Arrington who provides some excellent and concise commentary on Yahoo’s demise, including at the end of the interview his prediction that the interviewer will be …. out of a job soon.

I think the *key* point Mike makes is that where Google gets about .09 per search on average, Yahoo gets about .04.   He notes this is partly demographic and partly due to Yahoo’s search monetizing deficiencies that were supposed to be rescued by project “Panama” but were not.  I think this is per search query rather than per click on a search ad, but the point is the same – Google makes more than twice as much per search action, and this is a crushing advantage to have over Yahoo.

So, what is the endgame for Yahoo in the Microsoft deal?   We should know soon if the rumors of a News Corp deal are well founded or hyped up.   Some are suggesting that it’ll be very hard to fend off Microsoft in any case as they are likely to bid $35 per share soon which will about equal the rumored News Corp deal of about a 50 billion valuation for Yahoo.  

Disclosureizing:  Long on Yahoo

Online Activity Study


Thanks to Metroknow for this link to a study about online activity including kids.  Symantec, maker of Norton Security, did the study and here are some highlights from the study of kids activity:

  • Making friends. About a third of U.S. online children ages 8-17 have made friends online (35%). When you look at teens, the percentage increases, with 50% of U.S. teens ages 13-17 reporting they have made friends with people online. One in three U.S. children (33%) report that they prefer to spend time with their online friends the same amount or more than their offline friends.
  • Social networking. Seventy-six percent of U.S. teens ages 13-17 years old “constantly,” “frequently” or “sometimes” visit social networking sites. Globally, about half of boys (51%) and girls (48%) visit social networking sites. Like mother, like daughter and like father, like son! That’s right…kids take after their parents when it comes to social networking. Case in point: 47% of U.S. parents “constantly,” “frequently” or “sometimes” use social networks while 46% of U.S. children report the same. When you look at China, the numbers are 78% of adults and 85% of children.
  • Shopping online. About one in three (35%) U.S. children report being “very confident” or “confident” in shopping online. This number shoots to 69% among children in China.
  • Getting requests for personal information. About 4 in 10 U.S. teens (42%) ages 13-17 have received an online request for personal information.
  • Being approached by strangers. U.S. children report that 16% of them have been approached online by a stranger; however, U.S. adults believe that just 6% of children have been approached online by a stranger.
  • YaFoxHoo? Now that makes some sense…


    The rumors of a potential offer from News Corp for Yahoo are interesting and CNBC claims they’ll have some new news from news corp in a few minutes, though I’ll be surprised if this is more than rehasing the rumors swirling around that appear more as linkbait for blogs than substantial information.    

    CNBC is referencing Jessica Vascellaro’s story at WSJ:

    The deal would allow Yahoo to remain independent while giving News Corp. substantial control over a huge array of Internet properties and advertising opportunities.

    News Corp, already a key internet player because they own Myspace and many Fox properties that have huge online visitation, could leverage the Yahoo aquisition to some advantage, perhaps through monetization optimizing, cross promotion, and such.    However I would not want to try to make the case to Murdoch that Yahoo is worth *more* than MS already generous offer.   As employees run for the door and the board is more interested in fighting than switching, I’m not clear Yahoo should be playing hard to get right now with anybody.

    Disclosure:   Long on Yahoo

    The Price of Danger: $500,000,000


    Microsoft just picked up Danger, inventor of the Sidekick mobile device and overall very clever mobile company founded by Andy Rubin who is now working for Google on Android and Open Handset Alliance stuff.

    Om Malik is quoting the price as 500MM after what his reasearch showed was 225MM in past injections of capital.   

    Although at first glance everybody thinks these deals make huge money for everybody associated with them, this is not the case.   As we’ve noted before average VC deals  *lose money*, and more importantly you always need to factor time into these equations to make sense of the profitability of a deal.

    In this Danger sale people made out well, but depending on when the big money was invested it’s not clear anybody had a spectacular return here unless the big money came in very recently (I don’t know if it did or not).

    Why would MS want this company?   As with the Yahoo aquistion and as MS has done for so long, they are trying to gain a huge foothold in key markets by buying up a key company in the space.    I’m expecting some competition for the Google/Dell phone to be announced soon.

           

    Yahoo Executives – kudos for true believing, but sell the place anyway!


    A lot of folks have been very hard on the Yahoo board and Jerry Yang in particular for fighting the Microsoft takeover bid, but it should be noted that almost more than anybody these folks are playing with their own money, and the stakes are huge.

    As Fortune reports Jerry Yang’s got more than a few Yahoo shares, and this he’s effectively “gambling” with his own money as he powerfully resists the fat Microsoft offer.    If Yahoo stock tanks – as it certainly will if Microsoft backs out – I won’t be all that much worse for the wear but Jerry would be taking something like a *half billion* hit to his net worth.   That’s real money, and you’ve got to admire Jerry and the board for believing so strongly in their “new” vision for the company that they are willing to bet they can regain their former glory.  

    Of course, maybe they *can* regain their former glory, but that’s a bird in the wild and wooly internet bush and Microsoft’s offer is *billions of birds* in the greedy little hands of investors.    This is not a tech issue – billions of Microsoft birds in hands are better than a few Yahoo birds in the bushes.   

    Disclosure:  I have some YHOO, though fewer than Jerry Yang.

    Yahoo + Microsoft? Heck yes says Legg Mason, with 6% of Yahoo


    Larry Dignan is reporting that major Yahoo Shareholder Legg Mason is insisting that Yahoo make a Microsoft deal, though they hope and may expect MS to up the offer past 31 and up to 40, which Fund manager Miller stated appears to have been MS’s highest previous offer over the past year of flirting with Yahoo about a merger.

    Miller says about Legg Mason’s position:

     We think this deal is a strategic imperative for MSFT, and that YHOO is in a tough spot if it wishes to remain independent.

    Strategic imperative or not, Yahoo can’t expect investors to sit back and wait for something to happen when this much money is on the table.   In fact I think investors are already upset that Yahoo is basically suggesting this is their course of action – waiting for prosperity to fall upon them but not in the form of Microsoft.

    I should say that given the market’s horrible reaction to the aquisition I’m not at all clear this is good for *Microsoft*.  If they screw up managing Yahoo and/or Yahoo can’t revived it’s sagging profitability fast this could go down as a Time Warner AOL fiasco kind of move for Microsoft.  However, if they want Yahoo I think Microsoft’s strategy from this point on can be very simple:

    1.  Offer $34 per share publicly and loudly.
    2. Call Legg Mason and other big holders, and tell them this is *OFF* if Yahoo keeps waffling.
    3. Bring in fat lady to sing       ….         it’s over.

     Disclosed:  Long on Yahoo. 

    Hostilities erupt between Yahoo and Microsoft


    Hey, looks like now it’s an official *hostile takeover* attempt from Microsoft in the battle for the internet giant Yahoo.

    Yahoo declined Microsoft’s offer of last week and in this press release Microsoft basically declares their intention to duke it out.    I’m surprised they have not upped the ante yet, but perhaps they are waiting for more drama and information before making a “final” offer to the Yahoo board before taking this directly to Yahoo shareholders.    Although I think most shareholders would take the MS offer it’s clear the *big* shareholders like Jerry Yang don’t want to, so perhaps Yahoo can win a proxy battle for the company.    I have a hunch however that the institutional investors, and the legions of small time folks like me, would jump at a 34+ offer and probably even take the current one unless Yahoo shows a lot more signs of life than screaming out the current rallying cry “We are fighting Microsoft!”