Archive for June, 2007

What Law Of Big Numbers?

Posted: June 27, 2007 in Uncategorized
I’ve been saying Google will be a $20 billion company before anyone knows it.  Specifically, by Q4 of 2008.
Well, not anymore.  Turns out other people are starting to say it, too.
William Morrison, an analyst with JMP Securities, is saying Google’s sales will hit $16.1 billion in 2008.
Guess it’s no longer a secret that GOOG is defying the law of big numbers.
Even though the jury is still out whether Jerry Yang can run YHOO… every single person on this planet agree that Semel had to go.
Ok, that’s an exaggeration.  But it’s not so far off.  I haven’t read a single report that even slightly lamented Semel’s departure.
Normally, this would send the stock higher… as it did in after-hours trading yesterday and early-morning trading this morn.
But, don’t forget that YHOO management slipped in an earnings preview into yesterday’s press announcement: 
     "Decker said she expects the results to be ‘between the mid-point and the low end of the range’ of expectations." 
Timing-wise, this quarter is being set up for a, "do over"… that’s why the stock is dropping.
Worse, it runs counter to the, "everything-is-great-and-we’re-so-excited-to-talk-about-it-during-our-upcoming-earnings-call" verbiage Semel was inappropriately bragging about at last week’s shareholder meeting.
A double burn.
At least that’s the way Goldman and Jefferies probably saw it as they downgraded YHOO this morning.
A triple and quadruple burn.
Hard for a stock to go up in the face of that stuff.
P.S.  If YHOO misses by a penny again, betcha Semel’s comp package is responsible for that miss… again.
Wow, that was fast. 
From "Absolutely" — Semel’s immediate answer to a shareholder question whether he still had fire in his belly — to his, "I pushed the board to do this sooner rather than later" type comments in yesterday’s press meeting…
… dare I say it must have been a looong weekend in YHOO-land?
What could cause such a turn-around?
Yep.  I think the company directors finally understood what a mess of liability they were playing with…
… what with the latest dollar figure of Semel’s selling spree pegged at $0.623 billion during his brief stint as CEO, ranking his comp package "926% above the median paid to CEOs at peer companies"…
… what with years of blatantly poor stock performance relative to competitors…
… someone — in a lawsuit — was bound to ask the question:  "Who did this?"

Wow, Yang DOES Commit!

Posted: June 18, 2007 in Uncategorized
Yahoo announced after the market closed Terry Semel will be stepping down and Jerry Yang will assume CEO position.
Lots to decipher here.  Right now all I can say is hats off to Jerry… this is a stud move.
Everyone knows founder Michael Dell saw his company in disarray and, without hesitating, stepped back into an operating role to save it.
Everyone knows Steve Jobs did something similar.
Everyone reporting on the YHOO shareholder meeting missed something really important…
…and that was, Jerry Yang, co-founder of YHOO, was challenged to do something similar… fill the most desperately needed position at Yahoo, which is that of CTO/technologist/visionary.
Unbelievably, when a shareholder suggested this, Yahoo CEO Terry Semel treated the question like it was a joke, saying something like, "well, sure, Jerry, what do you think, I’m not sure you want that career path, do you?" or something equally as inappropriately sarcastic.
Turns out that was a great suggestion. 
And, if Semel was a great CEO, he would have already lobbied Jerry to fill that role.  Duh.
And, if Jerry is a great founder, he would be seriously considering leaping back into the fight right now… he is, after all, a respected technologist and a real voice in the industry, just what Yahoo doctor ordered.
Alas, the suggestion was snobbishly brushed off by the pair. 
Says a lot.
Finally, a journalist that’s calling a spade a spade re: the YHOO situation. 
Great article from here (even a great job analyzing headlines!).
I watched the YHOO annual meeting webcast yesterday.  Unbelievably, Semel was not directly confronted on the most obvious question:
     "What objective measures did the board use to arrive at Semel’s comp package?"
There’s only one measure that shareholders care about… since GOOG’s IPO:  GOOG up 6x… YHOO down -4%.
Yet, Semel is the #1 top compensated CEO in 2006.  (AP analysis of 386 public companies and top corporate paychecks.)
Yesterday’s annual meeting confirmed it:  The inmates ARE running the asylum.
In fact, the way the pay-for-performance proposal was dismissed was almost offensive.  "Deemed not in best interest of shareholders."
Having some experience with this stuff, it seems to me that YHOO’s board should be deemed not in the best interest of shareholders.
Don’t know why this gets me so heated but I think it represents the worst abuse of corporate governance and exec comp.
YHOO shareholder meeting kicks off in less than an hour.
Shareholders and journalists alike continue their outcry against current YHOO CEO Terry Semel.  (Here and here and here and here and here, well, you get the picture.)
As Ricky would say to Lucy, "You got some ‘splaining to do."
With this said, maybe it’s best to conclude that Terry Semel is probably a capable guy just in the wrong job.
But who’s right for the job?
How killer would it be if Scott McNealy took over the reins at Yahoo?!
It’s too much fun to think of all the great reasons why this would be spectacular.
Scott is:
*  A great and respected technologist/visionary
*  Already considered a hall-of-fame industry spokesperson… he’s a natural magnet for press… as entertaining a showman as Jobs or Ballmer
*  Already knows what it’s like to run a major league technology company
*  Has never been accused of shareholder abuse
*  Is available
*  And last but not least:  McNealy vs. Schmidt… what a great story… old founders and friends now competitors, probably each with something to prove
The interesting observation is McNealy is everything that Semel isn’t… and everything that YHOO desperately needs right now to survive and thrive.
Michael Liedtke of AP has a good piece today about what Yahoo CEO could face at Tuesday’s shareholder meeting.
With GOOG and YHOO continuing to move in opposite directions, I can only imagine the fireworks at the June 12th YHOO shareholder meeting.
If MSFT doesn’t pull the trigger, I wonder when some private equity group will take YHOO out?
Fact:  Over the last two years, GOOG is up close to 80%, while YHOO is down over 20%.
Fix:  Technology companies should be run by technologists.

Another Telling Headline

Posted: June 7, 2007 in Uncategorized
Sorry to sound like a broken record, but here’s today MarketWatch headline:
     Yahoo CEO’s pay too high, groups say
As my wife likes to say:  Ya think?

Another Killer Headline

Posted: June 6, 2007 in Uncategorized
Everyone knows I think headlines tell a story.
Lest anyone think things are slowing down in the online ad space, here’s the latest headline:
     Online ad spending surges
The subhead is just as interesting:
     No wonder Google stock’s at a record high
Those two headlines pretty much sum up the online advertising space.