Yahoo CEO Marissa Mayer Faces Morale Challenge

If they lay off the right people, it's more likely good people would want to go work there. Those good people would be able to make more progress with less unnecessary pushback from people experiencing cognitive dissonance, and the layoffs would slow and ultimately hiring (of more good people) could pick up.

McKinsey isn't going to get them there. That's a move of a dying company. Marissa Mayer needs to do this herself. If she doesn't know who the right people are to keep versus release, that's a bad sign.

I think Yahoo has had multiple interesting projects of enormous potential.

Yahoo.com, the homepage itself, has been and still is amongst the most trafficked websites on the Internet. Even now it's in top 5, coming before Amazon, Wikipedia or Twitter. See: https://en.wikipedia.org/wiki/List_of_most_popular_websites

Yahoo Mail existed before Gmail and I don't know what happens in other countries, but in my country Yahoo Mail is still the most popular web mail. But they've been bleeding marketshare, because frankly, Yahoo Mail sucks due to poor UI, poor spam filters and stupid restrictions (like they wouldn't allow POP unless you had a paid subscription). Compare with Gmail and the rise of Google Apps. Gmail with btw keeps people locked in Google's ecosystem, along with Android, insuring that Google's search engine also dominates mobile, because that's how complementaries work.

Yahoo Messenger was a natural extension of Yahoo Mail. In my country everybody was on Yahoo Messenger. It had enormous potential for building a social network and they even made a half assed attempt. Nowadays that's been replaced by Facebook and Skype. Even Hangouts is more popular amongst my acquaintances, because Yahoo Messenger also sucks and it's basically dead.

Flickr has been and is still is the best service for amateur and even professional photographers to share their stuff. Photo sharing is a really big market. Facebook, Instagram, Google Photos, Imgur, Reddit all of them have a place in photo sharing, plus I feel there's still enormous untapped potential in this place. But ALAS they let it stagnate, though I appreciate that in 2015 we finally have mobile apps. But then the Pro subscriptions are now more expensive and make absolutely no sense, as you're paying for something you can get with an ad-blocker - a fatal combination IMHO. I was a Pro subscriber in the past, but not anymore.

Their Search could still be a credible competitor. They just made a deal with Mozilla for distributing Firefox with Yahoo's search by default. But on one hand they ditched their own technology, now relying on Bing for their own results. And also they bring nothing new, while being inferior. They could at least take a stance on privacy, I mean if you can't compete by being superior, at least compete by being the ethical choice. But no. And I'm pretty sure many Firefox users simply switch back to Google, just like myself.

Delicious, just like Google Reader, had enormous potential for a specialized social network of things. They couldn't see value in it and sold it. Oh well.

Here's a thought:

There's a field where Google has been doing slightly worse as time goes by: questionable search. It's a running joke by now that Bing's video search is much better for searching porn that Youtube. Similarly, searching for " full album mp3 download" on Google is bound to return useless websites. Sometimes the actual results are to be found inside the text of a DMCA takedown notice, meaning that Google has the result, but refuses to show it to you.

And speaking of bad results, some specific terms (such as moving companies) are so full of SEO garbage that there's no way to get a reliable result.

There's definitely room for competition - otherwise, DuckDuckGo would have been out of business by now.

In fact it doesn't mean that. Its the assets on Yahoo's balance sheet that are being discounted by investors. Yahoo's business receives a multiple rather than a discount - whether that's a multiple on sales or earnings.

Cash and assets held on a corporate balance sheet are basically never $1 to $1 accounted for in a market cap. You can easily see that in action on the balance sheets of: Berkshire Hathaway, Apple, Comcast, Time Warner Cable.

Are we to pretend that Berkshire Hathaway's business is worth ~$140 billion after we strip out all of its assets (cash, stock holdings etc)? So its earnings are getting a 7 or 8 multiple? Obviously that's not actually how valuations work. If you stripped out all of their assets, they'd very likely still get a fair market valuation on the operating business and its potential, perhaps 13-15 times earnings.

A similar bogus claim was made that Yahoo was worth less than zero, when its Alibaba stake was at its peak. That's not actually how things work in reality, that scenario solely exists in a calculation.

In reality, if you spin off all of Yahoo's assets (specifically Japan / Alibaba), the business would still be given a multiple, a meaningful valuation. Even lowly AOL was still worth $4.4 billion in the Verizon acquisition, and Yahoo's business is two to three times more valuable than that.

There isn't a single example in the public market, in which a corporation with a relatively clean balance sheet, and $4 billion in sales, is given a negative ~$X billion valuation - much less a company that has historically been given high valuations as a semi-tech company. Which proves how absurdly wrong the negative value premise is (or the $1 to $1 asset discounting method applied to the assets, which are clearly not worth $1 to $1 in the market cap given taxation issues alone).