Friday, June 20, 2008


Like rats leaving a sinking ship, top execs are abandoning Yahoo! in droves. In the great debate over whether well compensated managers, loaded to the gills with stock options, actually add value or are simply lucky, the inability of Yahoo!'s execs, and President Susan Decker in particular, to generate organic growth or organize a sale, is an exhibit for the prosecution. (Exhibit B would be eBay, which has not created any shareholder value since 1999, although I'm sure Meg has drawn a salary in the past decade.)

Not that I believe a MSFT acquisition would have helped users, or MSFT at all, but surely Yahoo! shareholders deserve a break after having made no progress in 8 years? I expect that Jerry Yang will be asked to step aside, he's clearly the wrong leader for the company at this juncture, but I don't know who the "adult supervision" will end up being. As of 06-20-08 YHOO is trading at 23. Is now the time for a bold, contrarian play betting that MSFT will come back? Or, like LEH does the stock have 30% (and counting) downside left in it?

At this juncture in time it's fitting to consider Google, a company whose search product delights me more today than it did a decade ago when I abandoned altavista. The current CW is that Google is run by geniuses with a culture that is innovative, fluffy, and fantastic. When the tide goes out, we will see how true this is, for there are few second acts in the tech world. One of the most notable exceptions is AAPL of course, up a mighty 200x (that's 2000%!!) since 1985. The truest of true believers have been handsomely rewarded.


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