Once King now Idiot Child, Yahoo is circling the drain


There was a time Yahoo owned the Internet. They were the portal everyone went too. That’s one of their many problems. Yahoo keeps trying to be a portal again, apparently clueless the Internet has moved on. No one goes to portals now. First came the onslaught of search engines, and now social media is dominant. By contrast, Yahoo has barely changed. I mean, their idiot Yahoo Mail has a pathetically ineffective spam killer, and they charge for it – while Google Gmail relentlessly kills spam and is free. Who you gonna call to be a spambuster.? Not Yahoo, that’s for sure.

Today Yahoo announced they will lay off 15% and sell off its assets, which with the exc eption of its stake in Alibaba, is junk no one wants, except maybe for hugely cheap prices.

Yahoo’s stake in Alibaba is worth about $25 billion.

That number is remarkable because Yahoo as a whole isn’t worth much more than that. Indeed, if you subtract the value of all of Yahoo’s major assets — including a multibillion-dollar stake in Yahoo Japan (an independent subsidiary in which Yahoo is a minority shareholder) and a few billion dollars in cash — from its market value, you get a big negative number.

Cringely agrees, saying Yahoo is worth less than nothing, so sell off everything and become a VC or hedge fund or just return money to shareholders and shut down.

In practical terms there are only two logical courses of action for Mayer and Yahoo. One is to wind things down and return Yahoo’s value to shareholders in the most efficient fashion, selling divisions, buying back shares, and issuing dividends until finally turning out the lights and going home. That’s an end-game. The only other possible course for Yahoo, in my view, is to turn the company into a Silicon Valley version of Berkshire Hathaway. That’s what I strongly propose.

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