Yahoo! just down the curtain after a sales process that lasted six months and ended as we all expected: Verizon emerging from the fray holding a broken toy he always wanted.
To borrow an adjective used companies in the announcement of the deal, this is a “poetic” between Yahoo! and AOL combination, acquired by Verizon in 2015. Both are popular web companies in the 1990s which they have been maintained, as the songs of that era Hootie & amp; the Blowfish.
The many missteps of the past four years under the leadership of CEO Marissa Mayer and during a previous decade of errors could fill thousands of case studies from a business school. So this column will begin with an autopsy to see what you can learn from Yahoo! the technology sector.
1. It is crucial to keep expectations low
About a year after Meg Whitman took command of another disastrous technology company, Hewlett-Packard, did something strange: the new CEO told investors your company was a mess and it would take years to fix. It was not at all an inspiring message and the company’s stock plummeted to a record low in 10 years after the tough talk Whitman. But the play was brilliant. Whitman put on a very low goal, restored the valuation of the company and gained time to correct the ship’s course.
Mayer could not even tried to do the same in Yahoo! Instead, he announced to the four winds increased web traffic of the company, with the help of some white lies. And I can understand why. Yahoo! directory hired the company to make something big again (see item 2).
“I’m an optimist. I think all the leaders are, “Mayer told Bloomberg my colleague, Brad Stone, for an article in 2013. It could have been better taking the advice of technological investor Marc Andreessen:” If it were me, I’d put so expectations casualties nor seen, “he said shortly after Mayer was hired.
2. El Salvador CEO waters
Try to think of a technology company that has had a phoenix-like rebirth. Steve Jobs at Apple succeeded. IBM became almost death and trying another transformation. It is hard to think of more examples because it is unimaginably difficult to change course any company, especially a technology, once it started going under. Mayer was hired exactly for this impossible mission, so what is a mystery that central parts of Yahoo! are being sold to a twenty-fifth of the maximum price reached by the shares in the market?
That does not mean a technology company should apply for bankruptcy after sales stop growing, but it does mean that the boards of these companies may need to decide more quickly when to sell a company or start milking to extort money, rather than expect resurface.
3. You can not eat dessert if
do not eat vegetables When executives invest in projects that reward long-term need to earn permission investors drastically reducing costs. Mayer spoke eloquently about trying to replace dwindling revenues from Yahoo, from past fashion ads on the web, such as banners, with advertising techniques applied in vogue intelligent and automatic advertising buying phones. It spent billions of dollars on expensive acquisitions and achieved agreements with partners such as Mozilla, to find new ways to make money.
But, until recently, did not reduce costs to offset these risky bets. In 2011, Yahoo! had operating expenses by 4 billion 100 million dollars, more revenue and cost 4 000 380 million in sales excluding commissions paid to its partners. Before starting the forced reduction of expenses by investors, Yahoo! expenses in 2015 were 22 percent higher, reaching more than 5 billion, although revenue fell to 4 000 90 million d + olares.
4. Do not forget the people who pay the bills
Yahoo, Google’s parent company, Alphabet, Facebook and Twitter are very new technology companies who win almost all their money in the same way that William Randolph Hearst he did: selling advertising. And companies successful technology that rely on advertising know who pays the bills.
One of the many reasons why Facebook has been so successful is that it has two incredibly powerful executive, Sheryl Sandberg and Carolyn Everson, browsing the advertising side of the business. Twitter could have been an even greater disaster if it had not had a competent driving on advertising remained active finance, until recently.
Mark Zuckerberg and Larry Page can not be friends of the powerful lord of notices Martin Sorrell but the CEO of Alphabet not fall asleep for a meeting with advertisers like Mayer did. Zuckerberg did not hire a chief advertising with huge salary and then fired him, as did the CEO of Yahoo. Mayer understandably focused on the technological operations of the company, but it would have been better if he had found a strong advertising partner. Perhaps someone like (warning of “poetry”) Tim Armstrong, his sometime colleague and now Google advertising executive at Verizon, who could easily pick things up from where she left them.
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