If you’ve seen the internet today you know that everyone wants to talk about their feelings regarding the union of Yahoo! and Tumblr, those icons of two different generations of internet orthography. Do you prefer the florid olden style of Extraneous Punctuation! or the sleek postmodern vibe of Mssng Lttrs?1 Let us know in the comments or, of course, on your Tumblr. Here’s Goldman’s note:
Management cited the “uncanny” fit between Tumblr, with its fast-growing but largely unmonetized usage, and Yahoo, with its strengths in monetization but declining engagement.
Many people would think “avaricious widely disliked company” and “well-liked nonprofit, more or less,” would not be a good fit for each other, but I guess “uncanny” doesn’t actually mean “good.”
The press release is … terrible? Unspeakable. “Per the agreement and our promise not to screw it up, Tumblr will be independently operated as a separate business,” begins the second paragraph. Are you encouraged? If you’re a Tumblr user? (Not really, right?2 ) If you’re a Yahoo! shareholder? I drew you a picture:
Etc., etc., there is this: Read more »
We talked a while back about how “corporate governance” is a thing that exists more or less orthogonal to the thing that is “running your corporation as though you were a group of competent humans,” as evidenced by the fact that Citi’s mangled and perhaps legally problematic semi-firing of Vikram Pandit has been celebrated as a paragon of good governance. I don’t really know what “corporate governance” is, if not that, but much of its semantic space is covered by:
- do your directors and CEO like each other? – [ ] Yes [ ] No
- do you have strong takeover defenses? – [ ] Yes [ ] No
Two “No” answers = good governance; two “Yes” answers = sketchy.1
You might if you wanted to attempt to quantify those things – which is more important, and how if at all does the good governance that they reflect translate into things like shareholders making money? I enjoyed this Lucian Bebchuk DealBook post on a paper he wrote about golden parachutes in part because it gets at that a bit. Golden parachutes are a weird takeover-y topic: CEO employment contracts that provide for big payouts upon acquisition look formally like takeover defenses, insofar as they cost an acquirer money, but they’re actually sort of an anti-takeover-defense. They encourage takeovers since they’re a sign to acquirers that the CEO is not going to make things difficult if he gets a bid.
Anyway Bebchuk and his coauthors look at some data and find: Read more »
If you’ve got any ideas, don’t be shy. Read more »
Which, it turns out, were not very helpful. Read more »
The year 2012 has been an eventful and unpleasant one for Scott Thompson. In January he left his post as head of Ebay’s PayPal unit to become the new chief executive officer of Yahoo!. In May activist shareholders revealed that an entry on his résumé claiming that he had a bachelor’s degree in computer science was inaccurate. Less than two weeks later, Thompson was gone from Yahoo, undergoing treatments for thyroid cancer [he is cancer free now] and seemingly vanquished from the Silicon Valley scene. Now, the comeback: Thompson has signed on as CEO of ShopRunner, which is organizing a consortium of retailers to offer perks like free two-day shipping for online purchases. [Businessweek]
Considering he’s now a Yahoo! board member, Dan Loeb presumably approves of the hire but one should always assume a cross-check on his or her credentials will be run anyway, just in case. [WSJ, related]
Facebook will lose dominance as a major web company in less than a decade, Eric Jackson, founder of Ironfire Capital said Monday on CNBC’s Squawk on the Street. “In five to eight years they are going to disappear in the way that Yahoo has disappeared,” Jackson said. “Yahoo is still making money, it’s still profitable, still has 13,000 employees working for it, but it’s 10 percent of the value that it was at the height of 2000. For all intents and purposes, it’s disappeared.” [CNBC]
It seems that some combination of Dan Loeb persistence, cancer, and possibly incorrectly filled out job application paperwork have brought down Scott Thompson at Yahoo, and that’s not the only success activist investors have to report recently. From Bloomberg:
A generation ago such investors typically grabbed headlines under a different label: corporate raiders, robber barons, barbarians at the gate. In boardroom dramas, they were cast as the cold, calculating capitalists who ruthlessly used their power to slash jobs, liquidate assets, and destroy venerable brands. …
No more. Today, Icahn is the elder statesman in a generation of activists as likely to be praised for holding management accountable as condemned for draining a company’s value. So how did the robber barons of yesteryear become the shareholder’s best friend? Why do they now seem more interested in running companies than stripping them? The answer comes down to a shift in rules, techniques, and investor attitudes. Leveraged buyouts and hostile takeovers have morphed into proxy battles, ad campaigns, and shareholder resolutions.
Part of me wants to read this as a symptom of broader economic changes. Gordon Gekko wanted to layoff unionized mechanics because in 198whatever the private sector employed unionized workers and they got paid a relative lot. Now the private sector employs outsourcing and the guy to get rid of is the CEO, because that’s where the money is. Read more »
Last Thursday afternoon, hedge fund manager Daniel S. Loeb, who is waging a proxy battle against Yahoo, made a simple request: that the board of directors fire CEO Scott Thompson, who had lied about having a computer science degree from Stonehill College, when in fact the academic fraud only graduated with a degree in accounting. Loeb wanted the job done by Monday at 12 noon, EST and as the deadline passed, it was clear the request was would not be honored. As a result, Loeb was forced to demand every single document related to Thompson’s hiring at the company. Emails, heading hunting referrals, thoughts, feelings, the works. Most importantly, the résumé Thomspon submitted when applying for the gig. Did Loeb enjoy dragging this out? No. Did he take pleasure in watching the “carnage” unfold? Certainly not, and he’s shocked and offended anyone would ever think that. Nevertheless, a computer science degree had been fabricated out of thin air and Loeb felt he owed it to shareholders to get some answers. And while Yahoo! has presumably not yet faxed over the documents he asked for, they did offer this: Read more »
In fact, hand to god, Dan Loeb and Co. find this “embarrassing episode” that they set the wheels in motion for painful to watch. Read more »
Patti S. Hart, the Yahoo director who headed the board search committee that picked Scott Thompson as the company’s chief executive, will not stand for re-election, a person briefed on the matter told DealBook on Tuesday. Ms. Hart’s departure, which could be announced as soon as Tuesday afternoon, is the first significant response by Yahoo amid the growing controversy over Mr. Thompson’s academic record. The company is also expected to formally announce later on Tuesday the formation of a three-member board committee to investigate Mr. Thompson’s hiring and how erroneous academic information appeared in official company documents…Before last Thursday, Mr. Thompson’s biography said he had earned both accounting and computer science degrees from Stonehill College in Massachusetts. After prodding by the hedge fund Third Point last week, Yahoo conceded that Mr. Thompson had earned only an accounting degree. Ms. Hart’s biographical information also misstated her academic credentials, saying she had a degree in marketing and economics when it was in business administration. [Dealbook, earlier]