Ever since Microsoft’s failed bid for Yahoo, we’ve all been waiting for some sign of water on the dead planet. For months an away team led by Carl Icahn has kept alive the possibility that the second most popular search company and most aggressive acquirer of Silicon Valley startups might be concealing a clue.
Now, in a conversation with The New York Times’ Miguel Helft, CEO Jerry Yang has revealed that water does indeed exist on the Sunnyvale campus. “We have a plan,” Yang said. “We want to grow the business over a three- to five-year period. We are executing against that plan. And we are still doing that despite all the stuff that’s happened to us.”
The Times probe goes on to summarize the methods used to obtain the ice sample necessary for testing: Announce a restructuring months after failing to take Steve Jobs’ advice to cut from 16 to 4 product lines, and invite Microsoft to bludgeon the helpless company into accepting an offer clearly marked as “take it or leave it.” Next step: poke at the ice for a few months and watch the best of the startup talent amble out of the building (see Chad Dickerson’s And in the end…).
Finally, boil off the $20 billion in lost Microsoft lucre and then announce it’s just the right time to devote full attention to making Yahoo the “the most popular ‘starting point’ for Internet users” while also simultaneously “developing a powerful new advertising system that can place ads on Yahoo and other sites across the Internet.” No, it’s not CO2, it’s H20.
Let’s get this straight. Not only has Yahoo ceded any prayer of a social media play to Facebook and its ilk, they’re going to bust the portal model wide open with a new advertising system for “other sites across the Internet.” As Jason Calacanis points out on this Friday’s Gillmor Gang, ex-AOLer Jonathan Miller had all the right moves to transition the TimeWarner albatross out from under AOL’s modem farms, but not only did TW fire him but won’t let him do the right stuff again at Yahoo.
This suggests the same fundamentals that brought Microsoft down on Yang like a ton of bricks: announce the right plan at the wrong time after getting the right advice and applying it to a religious argument about the big bad Borg. Helft even suggests this could bring Microsoft back in yet one more time, this time with Icahin and two of his guys on the board to make sure the shareholders are disclosed about the internal negotiations for the next round of “offers.”
Yang’s other big problem is that Microsoft can and apparently is heading off any attempts at Yahoo acquisitions that might restart the deal flow and reverse the engineering outflow from Yahoo projects. Though the water cooler talk pegs the Powerset buy as double the value of the company, even Microsoft has acknowledged the target was the 60 people and the technology licensing the company obtained, not how those resources were applied in the code. The underlying message: Microsoft is willing to do what it takes to keep Yahoo pinned to the mat.
“I am more determined and more excited than ever to see those changes through,” Yang told Helft last week, who reminds us that Terry Semel said much the same thing at last year’s board meeting before leaving the board a week later. If Yang’s and the Yahoo board’s confidence is the only real sign of water, you won’t need the bridge they’re trying to sell you to get to the other side.