I was interviewed by DigiDaily (http://www.digidaydaily.com/stories/why-yahoo-s-next-ceo-should-be-from-nyc-not-the-valley/) on what I thought Yahoo’s board should be doing next.  Many believe that the only way out for Yahoo is to break the company up and sell it to maximize the value.  While I have long been a supporter of rationalizing some of the undervalued pieces (primarily the Asian assets), I  think the board has more than one option.  If they decide  NOT to sell the company and reinvigorate management, they need a true online media leader who is also tech savvy.  Carol was none of these things, although she did serve her purpose of streamlining some of Yahoo’s assets.  Many argue that Yahoo! is merely a media property and hence an old media executive could be brought in to guide the company’s future.  I think this is over simplified and not the correct direction for the company.  In my opinion Yahoo! is a tech driven media company, and as such, it needs a leader that not only understands media & advertisers, but the fundamental underlying tech trends that will set the tone of the Internet for the next 3-5 years.  Hence, a leader must have a media AND tech vision of where things going.  Much like Wayne Gretsky’s famous quote “skate to where the puck is going, not where it is”.  Media is becoming more “transactional” in nature, and the old days of merely putting up a digital billboard without tangible ROI is fleeting.  The tech vision must account for mobile (phones and tablets), local, social and video.  It should be global, and key acquisitions & partnerships should be established..now.  I believe there are a handful of execs that can fit this role (D. Rosenblatt, Phil Shiller, Tom Evans, J. Killar, J. Dorsey, Jon Miller, Vic Gundotra,  and a few more), but shareholders and the board would need to have patience to let the visionary put his / her finger prints on the company.

Again, while many assume that Yahoo! must sell the company, I think there’s more than one direction for the board to go.  The company has a great balance sheet and a lot of option value that in the right hands, may provide more value that a mere sale…..

Bob Peck

Posted by Robert Peck CFA at 9/7/2011 9:21 AM