Yesterday, Kara Swisher reported that a bunch of private equity firms are sniffing around Yahoo.That in itself is nothing new–and it’s not necessarily good news for the company.
A Joe-Schmo private equity firm would just come in and load Yahoo up with billions of dollars of debt, chop it up, fire maybe 5,000 people, sell off the Asian assets, pay itself a huge dividend, dump the temporarily prettied-up core business on News Corp, and then move on.
The private-equity principals would get rich(er). But Yahoo, in all likelihood, would be done. (Not that News Corp. would know this when it bought it).
But Kara’s report also mentioned something that is great news for Yahoo: Andreessen Horowitz and Silver Lake are two of the firms sniffing around.
Unlike the vast majority of private-equity firms, Andreessen Horowitz would likely know how to fix Yahoo. It still might restructure it and fire a boatload of folks, but it would understand what the key assets are and how to make them vital and growing again.
Andreessen Horowitz would be able to attract the top tech and digital talent that is necessary to revitalize Yahoo. Its partners (Marc Andreessen, Ben Horowitz, Jeff Jordan) have the strategic, turnaround, and operational experience necessary to make the tough decisions, and they have the reputational strength and communications skills necessary to lead the company through this transformation. And the firm has the connections and expertise necessary to get to anyone and make anything happen.
They couldn’t run Yahoo by committee, of course. Either Ben or Jeff would have to put their VC careers on hold and run Yahoo full-time–or they would need to hire a great CEO and work closely with him or her. But it’s hard to imagine a better team taking over the company.
Another interesting and important point is that Andreessen Horowitz might not need to buy Yahoo outright to make all of this happen.
It might merely have to take a major position in the company–say, 10% ownership–and win the support of other major shareholders and the board.
Yahoo’s board has admitted publicly that it has no idea what to do with the company. It has also gone so far as to hire three separate investment banks to help it figure this out.
Andreessen Horowitz would know what to do with the company. And it would provide this guidance without demanding tens or hundreds of millions of dollars in fees. So it should not be hard for AH to basically get Yahoo’s board to stand aside while, for all intents and purposes, it takes over the company.
We haven’t confirmed that Kara’s report about Andreessen Horowitz is true. But for the sake of Yahoo, we hope it is.
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Disclosure: Marc Andreessen is an investor in Business Insider. (No, he did not tell us to write this post. No, we did not write it to blow smoke up his arse. As employees and shareholders of Yahoo, we’d be thrilled if Andreessen Horowitz bought it.)
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