What Happens Next
Picking a new CEO gives Yahoo a chance to change the focus of the company management. The challenge is to find a replacement CEO who has a vision of where Yahoo can go and the leadership skills to get there. Yahoo has a strong online media and technology presence. Parts of the business like Yahoo Finance, Sports and the email system allow the company to attract over 600 million regular users. The problem is advertisers believe ad money is better spent with Google and Facebook, resulting in steadily declining advertising revenues for Yahoo.
Yahoo may be a company where the parts are worth significantly more than the current whole. In the online business press, comments have been made that the company's Asian properties, including Yahoo Japan and the 40 percent ownership stake in Ali Baba, are worth near or more than the current market value of the whole company. This gives the possibility that one of two choices could happen at Yahoo to boost the company's value:
The new CEO may be given a green light to sell off the Asian assets, bringing in a large amount of cash. A portion of the cash could be used to pay a one time, large dividend to shareholders, a la Microsoft, and the balance reinvested into the core Yahoo business to build it up further as a premier online media company, increasing the company's attractiveness to advertisers.
Another possibility is an outside media company buys up all of Yahoo and splits up the company, spinning off non-core assets and using the Yahoo media system to bolster the buyer's Internet presence. There seems to be widespread belief that the core businesses of Yahoo are worth significantly more than what the stock price shows that value to be. The business just needs someone; a new CEO or a completely new ownership structure to unlock that value.
Just up in today's (8-9-11) news: An Irish betting company lists a current Yahoo executive, Ross Levinsohn, with the top odds to be named as the company's new CEO. Mr. Levinsohn is currently exec VP of Americas at Yahoo. Naming an insider as replacement seems to suggest the company will not be moving in any new directions soon.