
Yahoo Sale ‘Book’ Reveals Financial Meltdown and Big Bet on Mobile Voice Search - shawndumas
http://recode.net/2016/04/06/yahoo-sale-book-financial-meltdown/
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jhulla
IMHO, Yahoo Finance is a wildly undervalued asset. It has the deepest and
highest quality data integration of any publicly available site. I use it
every day.

It has also been largely ignored for better part of a decade. Three areas
where Yahoo just fumbled the ball: 1) Portfolio tracking, 2) Message boards
and 3) Monetization. None of these have been upgraded in years.

Portfolio tracking is an exercise in good UI & UX. Yahoo could and should have
bought any number of good teams over the years that have built portfolio
trackers.

Yahoo finance message boards have very low signal to noise ratio. They should
have either gone the reddit model of comments or even better, Yahoo should
have bought Seeking Alpha a long time ago. Alternatively, when Seeking Alpha
began to grow, Yahoo should have built a competitive product. Instead Yahoo
let their message boards turn into a low value destination.

Monetization - this is just comically inept. Visitors to finance sites have
and care about their money. They also tend to be older. Some of the highest
paid ads target these people: Credit cards, mortgages, health, travel,
banking, personal loans, autos, etc.

Yahoo finance should have been the center of a massive business unit at Yahoo
generating a substantial percentage of their revenue.

What went wrong?

~~~
vidoc
I agree. I would think that the problem of yahoo finance is an engineering
problem: in fact, Yahoo finance was built on a solid technology that was good
10 years ago, but has basically been kept under maintenance ever since.
Several attempts have been made to modernize it and they have almost all
failed. In addition to this, yahoo finance has been an interim property within
yahoo for many years, the kind of place where middle managers would find
shelter before their next career move, hence the lack of risk taking. So far,
it remains the best finance website in my opinion, but it's sad when you think
about how much better it could be.

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dharmon
The most relevant portion is buried at the very end:

> While some are scared by the numbers, everyone I spoke to plans to make a
> bid of some sort, largely because even as financially precarious as it has
> become, Yahoo remains one of the biggest properties on the Web and it is
> hard to be able to buy that kind scale easily.

> “It’s like a dilapidated house in Silicon Valley — you walk in and are
> overwhelmed by the work that needs to be done and how bad it has gotten,”
> said one potential buyer. “But then it’s in a good neighborhood, the market
> is nuts and there’s not many like it anymore, so you have to hope you can
> fix it.”

~~~
gcb0
the most likely explanation is that Yahoo is being mismanaged to drive price
down.

there's a saying that translates roughly to "you bad-mouthing things you want
to buy".

~~~
HelloRipley
nokia

~~~
bithush
Yes because that was an incredible purchase for Microsoft!

~~~
wodenokoto
Well, yes and no. I think the plan was to stop mismanagement after the
purchase, but someone forgot to execute that part.

~~~
bithush
I think it was more Ballmer not having a clue about mobile. When I first saw
his idiotic response to the initial iPhone I knew he would fail hard in the
mobile space. Even today I think his idea of a smart phone is a Windows Mobile
6 device.

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this_user
I am having a hard time recognising any kind of strategy on Yahoo's part. Does
anybody even know what the core of their business is? Are they a search
engine? Are they some kind of media company? An ad agency? What is that they
do? Meyer is seemingly done very little in her four years as CEO. She has
shifted things around internally, fired a lot of people and acquired some
things. But none of this seems to really go anywhere. The Tumblr acquisition
was already a complete bust and has resulted mostly in write-offs. No
technology company has ever dug itself out from a hole like this - no company
except for Apple, that is, and it took Steve Jobs to do it.

~~~
danso
I'll never not be able to think of how they spent $30 million on a text
summarizing phone app created by a 15-year old. How humiliating that must be
for Yahoo engineers, who have put out great technology and frameworks (such as
Pure, in the case of the latter) and could've easily developed this in-
house...but few people ever think of Yahoo engineers in nearly the same light
as Google or Microsoft engineers, and yet Yahoo is spending millions to
_further_ the perceived impotency of their engineers.

[https://en.m.wikipedia.org/wiki/Nick_D%27Aloisio#Summly](https://en.m.wikipedia.org/wiki/Nick_D%27Aloisio#Summly)

Though on a nicer note, great to see that that 15-year old, who was already
well-off before becoming a Yahoo millionaire, ended up quitting to go to
school to study computer science.

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kirykl
I remember reading a theory that this was a way to launder investment recovery
to Li Ka-Shing while disguised as an acquisition and PR move involving a 15
year old wonderkid (with well connected parents)

~~~
defen
> a way to launder investment recovery to Li Ka-Shing

Even if you hypothesize that he got all of the $30 million...does Li Ka-Shing
care? That's less than .1% of his net worth.

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npunt
His financial advisors might, even if he's unaware.

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spriggan3
Yahoo had/has a cool products, mail, groups, pipes, boss, Flickr ...

Instead of improving these products, Mayer went on a shopping spree and bought
useless things , like Tumblr (I'm sorry but Tumblr is a complete failure under
Yahoo), Sumly and basically let them rot, just like the previous products. And
she want to stay 3 more years ? without a serious plan ?

Ultimately, MSFT will buy Yahoo, so I'm sure Mayer will get a good bonus, but
what a fiasco she was.

~~~
duaneb
I disagree, tumblr as a social site has fluorished under Yahoo. If twitter,
facebook, and pinterest have shown anything, you can build the community and
pivot into profitability.

If you want to see failures, look at flickr or delicious.

~~~
spriggan3
> I disagree, tumblr as a social site has fluorished under Yahoo

Tumblr is a commercial failure under Yahoo. It didn't make money then, it
won't make money now.

> twitter, facebook, and pinterest have shown anything

Neither of them have been acquired by another company... let alone Yahoo.

> look at flickr

Flickr has actual paid users and is one of the only service at yahoo that is
still relevant.

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balozi
Maybe Yahoo! should build a smartphone. That'll solve all their problems. Hey,
I'm just trying to help.

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wehadfun
Don't understand why Yahoo is in such free fall. It is easy a top 10 website.
Ads on the site probably sell for millions. Their content / engineers/tech
can't be that expensive. What are they spending all that cash on.

~~~
vthallam
Problem is they don't just focus on few products/sites, instead they make like
random products(eg : livetext) and acquisitions(quite a few which were
shutdown later). Focus is the key. Apart from flickr & Tumblr, there is no
other product they own is very attractive.

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nerfhammer
So, is the problem just that Yahoo doesn't have a good narrative about itself?

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vthallam
Kind of! As a normal guy, i can only speculate. But, it's pretty obvious that
they don't have a strong product line. The products like
Tumblr,finance,fantasy sports,Flickr are good, but none of them has a monopoly
over certain area. Also, the ad network media.net which is in collaboration
with bing is no where a hit. Yahoo hires really good engineers(some friends
work there), but i guess the people in the management clearly doesn't have a
strategic vision.

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chinathrow
I am not going to use mobile voice <anything>. Not unless we have local AI
processing natural speech on my own device. No cloud voice fingerprinting for
me, ever.

I imagine there must be companies already buying voice prints and cross
referencing them with voiced heard in stores to identify/target customers
somehow.

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smegel
> Yahoo Japan switched to Google many years ago

What _is_ Yahoo Japan? A completely different company or something?

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bduerst
Yes. It's a joint venture with Softbank.

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chris_wot
I'm currently writing off Yahoo. No matter what happens, it's been managed to
badly I just can't see how they can make a comeback.

Years ago they had a chance to claw their way back, but not any more.

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Nelson69
What would be considered a come back for them? Is it even possible to define
that?

Over the years they've had decent income, they have great traffic numbers,
they have all these things that seem to indicate success inside the echo
chamber. Now they've got a shit brand, the brand is right there with AOL. They
aren't going to have google or facebook numbers though, I don't know that I'd
expect any other company to match those though.

It's just a game now, tons of people are envious of their traffic. they've
probably got some great properties as well, sports, finance and fantasy sports
seem to be universally enjoyed. Someone just wants to steal it for as cheap as
possible.

~~~
chris_wot
Split the properties off into seperate companies, with their own management
with little interference from the parent company.

And remove Marissa Mayer, who has made some absolutely dreadful business
decisions and continues to make them. Sorry this is harsh, but she's had many
years to prove herself now, and she has shown that she's not the leader that
Yahoo needs to restore its past glories.

Unfortunately Yahoo is a shell of its former self, so I can't see how else
they can resolve their problems except by giving different business more
autonomy and zero interference. It's rather Darwinian, but those who will
succeed will survive, and those who were never viable (of which there were
_many_ companies who were purchased for Mayer who would have ultimately folded
eventually) will wither and die on the vine.

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cft
"stock-based compensation remains steady. At well over $400 million annually
now, that’s double what it was only a few years previously and means CEO
Marissa Mayer is loading up valued employees with outsize share grants to get
them to stay."

That's the cargo cult she follows from her days at Google: valuable employees
like herself get lotza stock, and _therefore_ the company magically prospers.

~~~
acdha
Isn't that true of basically every modern company? A term like “cargo cult” is
way too strident for a practice which is so widespread – we don't even know
whether that's a few executives getting a big payout or a bunch of key lower-
level employees being convinced not to bail.

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ryandrake
Yep. Giving a total dollar value is meaningless because at most places, the
top execs get inundated with stock--millions and millions of dollars worth--
and the rank and file get nothing or close to nothing. Would love to see the
distribution.

~~~
throwaway_xx9
Under Marissa, engineers stopped receiving options and instead were being
offered $40,000 in "stock replacement" over 4 years - worth about 3% - 5% of
what a Google engineer would expect (unless they were hiring somebody away,
and then they would match the previous company.)

So, cab fare for most new engineering hires.

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draw_down
They keep switching courses, now the new thing is a Siri "competitor"
apparently. Except Amazon and Apple aren't even trying to make money on that,
they're adjuncts to actual products. There is definitely room to improve on
Siri (haven't used Alexa) but it's nonetheless markedly better than when it
started. It seems like not only a tough thing to get right, but again, there
is the issue of monetizing it. Just seems like a weird thing to go after.

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daralthus
The question is simple:

You have deep learning, what would you build with Yahoo's data?

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programminggeek
So, they are doing a good job of selling an overvalued asset? Seems like the
sales acumen exists somewhere in Yahoo!, just not in anything that is truly
going to help the company succeed.

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yanilkr
Ya who?

