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Will Yahoo sink or fly? April 18, 2007

Posted by John in Technology.
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”Heedless”. ”Yahoo stinks”. ”Ingored executives”.

Bloggers didn´t shred their words today when describing Tuesdays report from Yahoo, revealing that the companys net income fell 11 percent during the first quarter, compared to a year earlier.

The buzz among bloggers early Wednesday focused on the obvious competition between Yahoo and Google for banner ads and the performance of the top executives at Yahoo during the earnings conference call.

Larry Dignan, blogging on Between the lines, shares a few psychological observations from the call. The call didn´t go well, he writes. CEO Terry Semel “didn’t sound polished–he usually doesn’t. But CFO Sue Decker seemed off her game as well. You won’t get that perception via a transcript – it’s a vibe you pick up via audio,” he writes and adds that Semel was largely ignored by analysts.

Owen Thomas, blogging on Business 2.0 Beta also writes about the psychology going on during the call (he blogged the whole call). I laughed the reflection he made just moments before the presentation started: ”You know a company’s had lousy earnings when they play a nonstop mix of ultrarelaxing classical and New Age for their hold music”…

On hipmojo.com Froosh, beeing a Yahoo-shareholder himself, decribes a moment at the conference call: ”Terry Semel and CFO Sue Decker let one rip, everyone in the room heard it, and while everyone was probably being polite at the time, today the word is out that Yahoo! stinks”.  However Froosh argues for Yahoo as a great company – the best positioned firm to win in display/banner ads (which is why Google overpaid and bought DCLK for $3.1B, he states) – and he offers some creative options for the future. They include buying Facebook, working together with Microsoft, merging with Viacom and going private.

One reason for Yahoos immediate dip in after hours-trading after the conference call is that good news about the search technology effort Panama has not yet started to flow. 

“Despite Yahoo Chief Executive Terry Semel’s assurance that the new system, known as Panama, was “working like a charm” so far, investors knocked 8% off the company’s stock price in after-hours trading,” writes Alex Pham at Los Angeles Times. .

However on gigaom.com business writer Kevin Kelleher notes that Terry Semel several month ago was clear on the fact that the Panama search technology would not lift profits this quarter (but earliest at the end of the second quarter). According to Kelleher, Yahoo could be facing tough times in 2007, but it´s not because of Panama. Instead its due to the fact that Google is finally getting serious about banner ads. ”The real risk for Yahoo is that Panama is finally catching up to Google right as Google is catching up to Yahoo in its core market of branded – er, banner – advertising,” he writes.

So – is the future so bright we gotta wear shades or shoud we rapidly sell our Yahoo-shares? To be continued.

By John Furrier and Tina Magnergard Bjers

Comments»

1. gwhiz - April 19, 2007

Mrs. Decker has a tough act to follow in Mr. Reyes. On the surface it might seem they’re guiding similar companies… they’re just not that similar though. Ask Mr. Battelle… (nevermind, you already know this!) Semel’s crew is taking a different tack than Dr. Schmidt’s (and it shows in spades). I’d give Semel’s ship two quarters and if Panama’s not living up to Semel’s build up… He’s sailing into the sunset.

2. Jon Smatz - April 19, 2007

gwhiz: Yahoo has such a big opportunity. Unlike Microsoft who missed the boat in a big way with search Yahoo has real assets to put the ‘leverage squeeze’ on google. The problem is that they don’t know how to do it and execute it. I know some smart people at Yahoo who know how to compete and win but aren’t given the shot by top management. The deportalizaion of the Internet may just put Yahoo on a slide that may be hard to recover. Google is not only throwing off more cash but executing a solid product war on many fronts.

3. John Furrier - April 19, 2007

Good points. Dan Farber has an excellent post on his take away from Jeff Weiner at Web 2.0 expo.

My favorite part from Dan Farbers piece with Jeff Weiner..””There is no pressure to do big acquisitions. There is pressure internally to get strategy right and execute on it.” Yahoo has been focusing on partnering with newspapers, Viacom and others, and on providing its programming and packaging prowess to give smaller players a taste of the Yahoo firehose, he said.

“At the end of day it’s not about who is hot, it’s not about who is getting attention today, it’s about building companies that last,” Weiner said, responding to a question about Google getting much of the attention and running circles around Yahoo. “Yahoo is the largest network.”

Thanks Dan

4. John Furrier - April 19, 2007

oopps here is the link to Dan Farber’s story on Yahoo at Web 2.0

http://blogs.zdnet.com/BTL/?p=4874

5. A sunny day in Google-land « John Furrier - April 19, 2007

[…] sunny day in Google-land Yesterday we posted a piece on the uncertain future of Yahoo, after the first quarterly result showed that the companys net […]


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