Yesterday, I informed Yahoo’s board that, if they want me to become CEO of the company, their first act after appointing me CEO will have to be to resign en masse.That was Steve Jobs’ condition for returning to Apple in the 1990s. And although I’m not Steve Jobs, I’m grateful for his teaching me how to deal with boards that are running companies into the ground.
Of course, I’m not actually expecting Yahoo’s board to call me up and ask me to be CEO, especially given the way I have been publicly needling them over the last couple of months (Although I do think that this move would be a smarter move than many the board has made.)
So my issuing public conditions upon which I would agree to accept the Yahoo CEO assignment is, obviously, to some extent, kidding around.
But enough kidding around.
Today’s news about the new deal Yahoo is pitching private-equity firms is the saddest news that has ever been reported about Yahoo. The “new deal,” according to the Wall Street Journal, is to get some private-equity firm to buy a minority stake in Yahoo and then issue itself a big shareholder dividend. This terrible plan shows just how far Yahoo’s board is going, to try to find some way out of the pickle it has gotten the company in … without actually fixing the problem.
And what’s so frustrating about this is that it’s no mystery how to fix the problem.
Yahoo needs to hire a strong CEO. A CEO with the vision and discipline to focus the company on what it is still great at and dispense with everything else.
That’s the answer.
Everything else — all these proposed asset sales and divestitures and transactions and dividend ideas we keep hearing about — are just ways to try to create a near-term pop in the value of the stock to placate angry investors and lessen criticism of the board.
Well, screw the angry investors.
Yes, Yahoo’s investors have every right to be angry, given the ways the board has helped bork the company over the past decade. But unless the investors want to come in and buy a control position and force Yahoo to do a needless transaction, they can just stay angry. Or they can sell their stock. Yahoo is a public company, after all, and if Yahoo’s investors are so angry about what the board is doing, then they’re always free to just dump the stock and move on.
If I were CEO of Yahoo the first thing I would do would be to deliver the following message to shareholders:
I believe in the future of Yahoo’s core business. Despite the disappointments of the past decade, Yahoo still has one of the best brands and biggest audiences in the world. I believe we can turn the company into a dynamic, growing enterprise again, and I will describe my plan for this in detail in the coming months. I want to say upfront, though, that this turnaround will take at least a couple of years. So if you’re impatient and looking for a quick score, please just sell your stock now.
Would Yahoo’s stock drop when I said that?
Yes, it would probably drop.
And so what.
Stocks go up and down. The value of private companies goes up and down. Whether Yahoo is private or public shouldn’t make a lick of difference to what management does to turn the company around. Yahoo should be run the way Amazon and a handful of other excellent companies are run: With a laser-like focus on serving customers, making great products, and creating shareholder value over the long term. Not on worrying about what the stock does this year or next — or on placating angry short-term investors.
To be clear: Convincing a private-equity firm to buy a stake in Yahoo so it can command the company to issue a big dividend to itself and other shareholders is not a plan to fix Yahoo. It’s just a plan to put some quick cash in the pockets of investors who already have plenty of it.
The only way to fix Yahoo is to fix it. Having tried and failed three times to find the right person to do this, Yahoo’s board is understandably wary about making the same mistake again. But any other plan isn’t a plan — it’s just an attempt to make fixing Yahoo someone else’s problem.
Yahoo deserves better than that. Yahoo shareholders and employees deserve better than that. Even Yahoo’s board members deserve better than that.
So I hope the board eventually wakes up and realises that. And then just hires a CEO who can get the job done.