Jackson has been an on-and-off shareholder in Yahoo since 2006, and during that time he has never shied away from voicing his opinions about the company’s health.
Recently he has bemoaned the weakness in Yahoo’s core business, an opinion which much of Wall Street shares. He has argued that Yahoo is obscenely overstaffed, and that it is doing a horrendous job adjusting to mobile. “What Yahoo apps do you have on your phone?” he asks. “That’s the problem.”
And now in an editorial in Forbes, he has set forward a drastic plan to right the ship — and it involves jettisoning Mayer and completely re-positioning the company as a video entertainment hub.
Jackson writes that Yahoo should save itself by transforming into an over-the-top video subscription network in the vein of Netflix, Hulu, and Amazon Prime. He claims is that if Yahoo launched such an offering, it would (arguably) be immediately better recognised than Hulu, presumably by virtue of its established brand.
But after that, Yahoo would have to prove itself in the market. While Jackson thinks Yahoo could produce some of its own content, he recognises it would have to cut licensing deals. He says that CBS, which is not part of Hulu, could be courted.
That is certainly true, but one issue Jackson doesn’t give a clear answer on is the question of whether Yahoo could indeed create its own compelling content to complement licensing.
With cable companies in a state of full panic over cord cutting, its hard to imagine a future where a new player like Yahoo could survive on licensing deals alone. Those deals just might cost a premium with major cable companies staring down the barrel of Netflix’s proverbial shotgun.
That means Yahoo would have to produce some of its own content in a way that doesn’t put them to sleep. Can it do that?
As Jackson points out, one strike against Yahoo is its ungraceful exit from Snapchat Discover a few weeks ago because their content was, in his words, “dishwater dull.” The hope is that Yahoo’s video content, some of which would presumably need to be consumable on mobile, wouldn’t suffer the same fate.
Jackson seems to recognise this threat. In his article he contends that to execute this strategy most effectively, Yahoo would “most likely need new owners and a new leader.” No more Mayer.
One suggestion he has for her replacement is Jason Kilar, former Hulu CEO and founder of Vessel, the online video subscription service that aims to knock YouTube off its throne.
Jackson’s plan is a drastic one, but he argues that it’s one that is good for Yahoo investors, employees, users, and partners. The question is now whether Yahoo investors will listen.