New York Times to Jerry Yang: Take a Hike

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The New York Times seems to agree with critics who suggest Yahoo’s board was not acting in the interest of shareholders as it fought off Microsoft offers for the company, including a final offer that in my view will prove to be somethng of an on-the-table smoking gun in this matter since Yahoo rejected a deal that would have allowed them to improve their own search monetizing routines rather than simply outsource them to Google.

The fact that Jerry Yang and David Filo, and the Yahoo board have a huge paper loss should give everybody pause to wonder about whether they may be rightt.  Perhaps keeping Yahoo pristine for a few years, unsullied by Microsoft’s cash and worldview, will lead to much higher stock prices?

…. or perhaps optimism and MS hostility has trumped common sense.

Disclosed:  Long on YHOO

Why O’Reilly’s wrong about Arrington being wrong about Yahoo being wrong about Microsoft

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What did the normally very insightful Tim O’Reilly and Fred Wilson have for lunch, some free hallucinogenic deserts over at Google?

Both are criticizing Mike Arrington for stating the obvious – Yahoo’s not acting in the best interest of shareholders or Yahoo or anybody except Google, who clearly is the big winner in Yahoo’s squandered megadeal with Microsoft.

Fred very correctly notes that Yahoo’s has faced leadership challenges for a long time, but he says he likes the one option that keeps the current Yahoo board intact and very much on track for much more of the same company crushing behavior. Yes, a clean house is needed and that is certainly less likely to happen *now*.

It seems to me there are two issues and they have it wrong on both counts where Arrington’s got it right.

First, Yahoo’s Google move proved that in terms of shareholder obligations it should have sold to MS. Yahoo cannot reasonably make a case that they will come out of the monetization hole using core values while immediately outsourcing their most potentially lucrative biz to Google. Sure this will make more than Yahoo alone, but nothing like what the MS deal would have offered Yahoo in terms of ad cash plus money to develop the search biz. MS offered a shot at glory. Yahoo took Google’s money so they could keep sitting back and watching the really big search money pass them by.

Is Fred saying there is a Googley path back to $34+ per share? Even if yes, it is nonsense to think it’ll happen fast enough to justify turning down MS’s offer of $34 and their subsequent offer of $35 for 1 in 6 of Yahoo’s outstanding shares.

Second, this just gives Google even more of a near monopoly on monetization. As Mike suggests competiton is lacking and needed in the search space. This is a big step in the wrong direction.

Disclosure: Long on YHOO

Disney and World Peace

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Millions of kids in America and around the world are big Disney fans.   So am I.

In fact I think that Disney may be doing more than *any other entity* to bring harmony and peace to the diverse and complex cultural landscape.   Although they avoid some of the complex and probably unsolvable problems like wahabism vs western culture, they really do a great job promoting racial understanding and cultural understanding via the diversity in the programming .  Simply *modelling cooperation and understanding* to a global audience is powerful,and when you add the huge appeal of Disney music and production values it works on more levels.  More powerful are shows like the upcoming special filmed in India where fun trumps conflict.

Is Disney’s a childish vision of global harmony?    Perhaps, but maybe that is the most effective path of all.

Yahoo adds an 8 billion dollar insult to the Microsoft Merger Madness

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Yahoo’s not just turning down an internet king’s ransom for a Microsoft merger, but they even rejected a partial buyout from Microsoft that would have given them 35 per share for several of MY SHARES and also woud have added a cool billion or so to the bottom line in an MS advertising deal.

Kara Swisher has more details, and is looking great with a hip new hairdoo!

My guess is that rejecting this modifed Microsoft Merger offer will put a nail in the Yahoo board’s coffin. They had a case – albeit a weak one – that Yahoo unfettered with MS could have dug themselves out of a hole, but this makes it even more crystal clear that they weren’t even willing to do *anything* with Microsoft. I think that would suggest a level of corporate indifference to shareholders that is going to leave a lot of folks….well…..ticked.

Disclosure: long on YHOO

Meteors and You

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Thanks to Glenn for this story suggesting a new study making a possible connection between early life and meteors.  

I’ve always been comfortable with the idea that life as we know it could emerge in slow and steady steps from the primordial soup that certainly existed on the millions of years ago, but it does not seem unreasonable to suggest that meteor material may have played a role as well, back when it was more common to have stuff raining down on the earth before our atmosphere formed which (thankfully) burns up most of that sh** before it crashes into the planet and ruins our sunny days.

Yahoo Google Agree to Thwart Microsoft and Icahn

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The Yahoo Microsoft Merger saga continues as Yahoo and Google have signed an advertising pact in the face of mounting new pressure on Yahoo to sell to Microsoft.     Carl Icahn, corporate mega-investor, has purchased a large stake in Yahoo and was preparing to force changes on the Yahoo board that have led to a Microsoft takeover.   Today’s announcement appears to leave the Microsoft deal in the lurch, though I’m not clear yet why Icahn can’t fight a proxy battle to get control of the company and then back out of the agreement.    Based on today’s news that is not part of his plan, though anything is possible in the rapid fire take no Microsoft prisoners battle where the Yahoo board appears more interested in thwarting Microsoft than doing good for Yahoo’s shareholders who today saw a drop of 10% in shares as another potential Microsoft deal crumbled.    Last year Yahoo rejected $40 per share, and a few months back they rejected $34.   One does not have to have much imagination to wonder how long it’ll be before they are rejecting $25.

An interesting investment question right now is whether Yahoo is priced low or high given all the new information.  If, for example, a new board will come in within a year or so it’s very possible that MS will make another aquistion offer well above current prices.  A new board would probably view this favorably.   If true Yahoo’s a good buy now.   However if the stubborness will continue for years it’s not at all clear that Yahoo can dig itself out of the profit and morale busting hole it’s been digging for several years while Google was eating Yahoo’s lunch and serving it back – free – to Google investors and employees. 

Disclosure:  I have Yahoo.   Which means I have 90% of the value I had this morning.

China Train Dining Car

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China Train Dining Car 555

Originally uploaded by JoeDuck

I was on two major train routes during the China trip. This was the dining car on the Hong Kong to Shanghai overnight train, a trip of about 1000 miles in about 30 hours. Contrary to what some had told me the train was very comfortable and also as clean as the Amtrak we’d taken from Portland to Minneapolis a few years ago. The beds were *more* comfortable and larger but unlike Amtrak did not fold into comfortable seats, rather you sit on the bottom bunk or in tiny fold down seats at the outside of your sleeper cabin.

Culturally this is a good experience because most of the travellers are Chinese. Food was only fair here, and they closed the dining car after about 9pm which was a shame because it was the most comfortable place to hang out. There was even a tiny little bar at the end of the car where you’d buy the Budweiser beers I had on both trains (odd, because Tsing Tao beer and Yanzing?, a popular beer from Beijing, was at all the restaurants.

Who are your 150?

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An increasing body of research is suggesting the humans have evolved for a group size of about 150.   Known as “Dunbar’s Number”, the idea is that in groups larger than this size our efficiency breaks down.    I think the working assumption is that we cannot track more than this number of people without losing a lot of resolution, and that we work best when we have a good and high resolution relationship with people:  http://www.commonsenseadvice.com/human_cortex_dunbar.html