Photo: Heidi Gutman/CNBC
An incredible thing happened to Yahoo yesterday.It went from a boring, lost, has-been of a tech company to one with actual promise and intrigue.
The reason there is hope at Yahoo isn’t because of a brilliant tech visionary who managed to turn things around.
It’s because a New York hedge fund manager came in, cleaned out the board, and hired a CEO who many insiders are stunned Yahoo was able to land.
That New York Hedge fund manager is Daniel Loeb. He has a 6% stake in Yahoo, and he’s been going to war with company’s leadership since last September.
While it seems like there has to be an easier way to make money, Loeb’s attack on Yahoo has resulted in big changes to a company that’s be long overdue for big changes.
When we had our IGNITION conference in November, everyone in the green room said Yahoo was toast because its board was totally incompetent. At the time Carol Bartz had been fired, and the company was adrift, looking for a new CEO.
The board had been in place for years and no one in the tech world had been able to change it.
That same board picked Scott Thompson, a man whose signature move as CEO was to infuriate everyone in the tech world by going to war with Facebook over silly patents.
The tech community wasn’t happy about Thompson, but it didn’t get him fired.
And yet, while Loeb was cleaning up the Yahoo mess, other tech companies were protecting themselves from ever having to deal with a nuisance like Loeb.
Google’s founders forced a new stock structure on shareholders with the goal of preventing someone like Loeb from ever disrupting Google. Facebook already has that kind of stock structure in place. Venture capitalist Ben Horowitz gave an interview warning founders to be wary of activist shareholders.
Horowitz admits, “some of these guys are great advocates of shareholders,” but his overall message is that outsiders need to butt out and let CEOs run their companies.
Yet, Yahoo, when run by an insider like Jerry Yang, totally lost its way.
It took Loeb, an outsider, to get the company pointed in a better direction.
If, in November, sitting in the green room at IGNITION, we told people Yahoo’s board would be gone and Marissa Mayer would be running the company, no one would have believed it.
Mayer might not be able to fix Yahoo. It’s a company with a lot of problems. And just because Mayer was successful at Google doesn’t mean she will be successful at Yahoo.
However, for today, at least, thanks to Loeb, Yahoo is actually a bright spot in the tech world instead of a blight.
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