TUESDAY NOVEMBER 18
Yahoo’s CEO: The Yin And Yang
In Chinese philosophy, the “yin and yang” are used to describe how seemingly opposing forces are bound together, intertwined, and interdependent in the natural world, giving rise to each other in turn. We don’t really care about that. We just want to know whether the departure of Yahoo! Inc. CEO Jerry Yang means Microsoft has another shot at the Internet giant – or at least perhaps Google or AOL have some hope of a tie-up. A closer look at why Yahoo’s stock is up and running today and just who might end up filling Yang’s big shoes.
November 2008
Yahoo! Inc., owner of the second- largest U.S. Internet-search engine, rose as much as 16 percent in early trading after Chief Executive Officer Jerry Yang agreed to step down, opening the door for a fresh Microsoft Corp. bid.
Yahoo shares climbed as much as $1.68 to $12.31 in trading before exchanges opened after closing at $10.63 on the Nasdaq Stock Market yesterday.
The Sunnyvale, California-based company’s market value has fallen by more than $20 billion since Yang took over as CEO last year as discussions with Microsoft failed, an ad partnership with Google Inc. collapsed and talks with Time Warner Inc.’s AOL stalled. Goldman Sachs Group Inc. said the resignation may fuel speculation of renewed talks with Microsoft or another suitor.
“The strategic necessity here is for this company to merge with Microsoft,” Larry Haverty, a fund manager at Gamco Investors Inc. in Rye, New York, said in a Bloomberg Television interview. Gamco manages about $24 billion, including Yahoo shares. “This is just unmitigated good news for the Yahoo shareholders.”
Microsoft and Yahoo trail Google, which controls more than 60 percent of the Internet-search market in the U.S. Microsoft has said that while it’s open to a search-ad deal with Yahoo, it isn’t interested in buying the company outright. Microsoft bid as much as $33 a share for Yahoo this year, and Yahoo now trades at less than a third of that value. Microsoft may end up paying between $15 and $18 for Yahoo, Haverty said.
Yahoo President Susan Decker is a candidate for Yang’s job, said Brad Williams, a spokesman for Yahoo. Yang, 40, will stay on the board and remain CEO until Yahoo finds a replacement, Yahoo said yesterday. He took the top job at the 13-year-old Internet company in June 2007.
“He played one too many poker hands up there and got caught,” said Pat Becker of Becker Capital Management in Portland, Oregon. His firm owns Microsoft shares but not Yahoo. “Microsoft still believes that it needs scale” in the online advertising business.
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