Thursday, July 31, 2008

Yahoo's Much-Delayed 'Meeting' on August 1: Much Ado About Nothing or Articulating a Compelling Strategic Vision?

The much delayed meeting at Yahoo is tomorrow. Nothing newsworthy may come out tomorrow because most thorny issues have either been already settled or need to be settled after August 1.

Question 1. What role for Yang? Icahn has patched up and he along with two members are on Yahoo's Board now. Now, he is not an activist outsider. He needs to steer, lead and guide Yahoo to be a force in the online space. That will take time and patience. The unanswered question then is--Will Yang be forced out by the Board not simply because of Icahn but because the company may need new blood and new energy?

Question 2. How will the Google relationship evolve? As of now, that relationship is still in play. No negative information from the Government; So, I expect that to continue as both assess the business value (and risk) of the experiment while they wait for the Government verdict (or inaction).

Question 3. Does Microsoft have any serious part in Yahoo's strategy going forward? All indications are that the story is over. But, it is safe to say that a big chapter (and many be a big section) is over but the story may not be over. It is simply because any serious challenge to Google should involve Yahoo (which is still capitalized at around $28B). If the stock price falls much below today's price of about $20, all options and all price levels are in play.

Tomorrow's meeting marks the beginning of Yahoo's next phase of evolution. While we may not see new news or theatrics (Carl Icahn will not even be present and T. Boone Pickens has sold his yahoo stake at a loss), we should watch for what Yang & Co. lay out as strategic directions and milestones. The market desperately is looking for some clarity now that the merger talks have ended. Will the expanded Board deliver on that expectation?

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