Starboard Value Letter to Yahoo $YHOO and CEO Marissa Mayer (video)

UPDATE 9 Dec 2015: Yahoo $YHOO Update: Reverse Spin Off Planned, Webcast Replay

UPDATE 24 Nov 2015: Yahoo CEO Marissa Mayer Faces Morale Challenge - WSJ: "When the Ms. Mayer is forced to deliver bad news, she employs what she calls a “jiu-jitsu move”—trying to create a diversion by producing tantalizing information, according to people who have worked closely with her. For example, Ms. Mayer created an accounting metric called “Mavens” designed to spotlight the growing parts of Yahoo. The grouping includes revenue from mobile, video, native and social ads but excludes Yahoo’s largest portion of revenue—its shrinking business of display ads on desktop computers."

UPDATES 20 Nov 2015:

• Yet Another Top Yahoo Media Exec Departs | Re/code: "...Barrett came to the Silicon Valley Internet giant in 2011 after a long and varied career in interactive media, including at the Los Angeles Times, ABC and Time Inc. He has most recently reported to Martha Nelson, the SVP of all of Yahoo Media. More pertinently, Barrett has been part of a major exodus of talent from Yahoo, which is still struggling under the leadership of CEO Marissa Mayer. Another top media exec, Ken Fuchs, also departed recently, as well as media head and CMO Kathy Savitt. Pressure on the former Google exec (Mayer) is increasing as press and also investors are calling attention to Mayer’s management and strategy for making the company relevant again..."


• Forbes gives the details of the ongoing disaster at Yahoo: The Last Days Of Marissa Mayer? - Forbes: "... most say a confused strategy and mismanagement, specifically from Mayer, has undermined any attempts at a turnaround. Yes, she originally brought hope, a badly needed focus on products and a keen understanding of technology. But as pressure to deliver results has mounted, there’s widespread belief, as reflected in that employee survey, that she’s no longer up to the task. The past few months have seen a mass exodus..." (emphasis added) - See also: SunTrust stock analyst Bob Peck to Yahoo directors: Time to fire CEO Marissa Mayer? - Silicon Valley Business Journal - BTW: When did Marissa Mayer become Yahoo CEO? Answer: July 17, 2012.

It has become increasingly clear that Marissa Mayer is not only grossly overpaid, but is way over her head as CEO of Yahoo. After disastrous moves that have cost Yahoo (NASDAQ: YHOO) shareholders hundreds of millions of dollars, activist investor shareholder Starboard Value has launched a new tack in a letter sent to Yahoo (pdf), sell Yahoo's core business and have the Yahoo corporate entity continue to hold its current shares in Alibaba (NYSE:BABA) and Yahoo! Japan (Tokyo Stock Exchange: Yahoo Japan Corporation) instead of the announced spin-off of those investments to Aabaco Holdings which risks unfavorable tax treatment:

"... we believe selling the Core Business now is the best outcome for Yahoo shareholders. We urge you to change direction and do the right thing for shareholders. As we have expressed to you, we expect the shareholders’ interest to remain of paramount importance and will look to make significant changes to the Board if you continue to make decisions that destroy shareholder value." (empasis added)

Principal domain names of companies referenced:
Yahoo - yahoo.com
Starboard Value -  starboardvalue.com
Alibaba - alibabagroup.com  /  alibaba.com
Yahoo Japan - yahoo.co.jp

For further reading:

• Starboard Value's Jeff Smith: The investor CEOs fear most - Fortune
• A Primer on Starboard, the Activist That Pushed for a Staples-Office Depot Merger - The New York Times
• Yahoo Plans Spin-off Of Alibaba Shares To Aabaco Holdings In 2015 | DomainMondo.com
• Yahoo Pressured to Keep Alibaba Stake and Sell Core Business - The New York Times
• Can Marissa Mayer Turn Around Her Turnaround of Yahoo or Is the “End Game Near"? | Re/code
• An NYU professor just said Marissa Mayer’s pregnancy is the only thing preserving her job - Quartz
• Marissa Mayer’s Convoluted Yahoo Strategy | Re/code
• Yahoo Hires McKinsey to Mull Reorg, as Mayer Demands Exec Pledge to Stay | Re/code

NYU Professor: Yahoo Should Be Euthanized, and Marissa Mayer Is the Most Overpaid CEO in History - Bloomberg Business (video below):

Allow video to load after clicking play. If video does not play on your device go to link above.


Follow @DomainMondo

DISCLAIMER

Yahoo Q2 2015 Earnings, LIVE Webcast, 5pm ET July 21 Replay

UPDATE (July 23, 2015): As discussed on the Q2 2015 earnings webcast, Yahoo has filed with the SEC to spin-off its Alibaba holdings into a new, independent entity: Aabaco Holdings, Inc. More information may be obtained from the SEC filings:

• SEC Filing: Form 8-K (July 17, 2015) "... Under the spin-off plan announced on January 27, 2015, Yahoo plans to distribute all of the outstanding shares of Aabaco Holdings pro rata to its shareholders. Immediately after the spin-off, Aabaco Holdings will own approximately 384 million shares of Alibaba Group, representing an ownership interest of approximately 15% in Alibaba Group, and a 100% ownership interest in a newly formed entity which will own Yahoo Small Business..."
• Form N-2: Preliminary Information Statement dated July 17, 2015
• SEC Filing: Form 8-K (July 21, 2015)

Yahoo Q2 2015 Earnings webcast above (replay).
Principal domain name: yahoo.com
Stock Exchange: Symbol - NASDAQ: YHOO
Second Quarter 2015
Read the Earnings Release (July 21, 2015)
Earnings Slides (pdf)

Screenshot from the YAHOO! Inc. Q2 2015 earnings press release

Yahoo! Inc. (NASDAQ: YHOO) today, July 21, 2015, reported results for the quarter ended June 30, 2015. (press release)

"I'm extremely pleased with our achievements in Q2, with revenue growing 15% year-over-year, marking our most substantial GAAP revenue growth in almost 9 years," said Marissa Mayer, CEO of Yahoo. "Our Mavens investment businesses across mobile, video, native and social grew to nearly $400 million in revenue this quarter, delivering 60% GAAP growth year-over-year. Further, our display business saw the most substantial revenue growth since 2010. Yahoo's transformation continues to make great progress."

Business Highlights--
Search:

• Over the past year, Yahoo's search presence has steadily grown through innovation and partnerships with industry leaders. In Q2, Yahoo introduced a new mobile search experience in the U.S. that connects users immediately to the people, places and things they care about by using context and location cues to deliver the most relevant search results.

Communications:

• In Q2, Yahoo delivered several new features in Mail including Yahoo Mail on Firefox Share which allows users to instantly share web pages when using Firefox; integration of Twitter and LinkedIn information in Contacts; and the addition of breaking news notifications to the Mail news feed tab.

Digital Content:

• In July, the Company launched Daily Fantasy, now available in the Yahoo Fantasy app, giving users the chance to win money every day with new fantasy lineups.
• Yahoo announced a partnership with the NFL to live stream an International Series Game between the Buffalo Bills and the Jacksonville Jaguars from London this fall.
• Yahoo launched new daily live finance, news and entertainment programming including Ultimate DJ, a global Electronic Music competition-style live series that is executive produced by Simon Cowell. The Company also announced 14 new shows across Yahoo's digital magazine channels including Riding Shotgun with Michelle Rodriguez.
• In Q2, Live Nation and Yahoo continued their partnership by kicking off a music festival live stream series to bring artists' performances from this year's most anticipated music festivals to our global audience.

Ad Technology:

• Yahoo announced the availability of independent viewability and fraud measurement for display and video advertising across the Company's programmatic buying platform, including Yahoo Properties. Advertisers can now choose from leading accredited, third-party measurement solutions to independently validate for viewability and fraud across display and video at every stage of the campaign lifecycle.
• Yahoo introduced new powerful formats to help advertisers reach their audiences: native video and video app-install ads. With native video ads, brand content can be as compelling as video while beautifully integrated into other experiences on Yahoo's homepage, digital magazines and apps. For marketers and developers looking to drive installs, the Company now offers a format that combines the engagement of video and the performance of install ads.

Investor relations: investor.yahoo.net


Follow @DomainMondo