Kara Swisher

Recent Posts by Kara Swisher

I Visited Yahoo and All I Got Was This Lousy Stock Price

Who let the dogs in at Yahoo?

It wasn’t BoomTown, for sure. In fact, I spent much of the day today at the Internet company’s Sunnyvale, Calif., HQ getting a preview of some really impressive and, more importantly, promising products and services in search, advertising, mobile and email.

It was heartening to see the kind of well-made Internet offerings Yahoo can gin up, even while it is in turmoil. I will do a longer post later on the visit–but, suffice it to say, some of it actually gave me hope.

Which is why it was a bit of a shock to me–and I can tell you, to Yahoo employees, too–to see its amazingly low stock price when I checked it during a break.

By the day’s end, Yahoo’s shares had dropped to $11.75, down 90 cents, or just over 7 percent.

Which means a market valuation of $16.3 billion. Which means just a little over two times trailing revenue. Which means nothing Yahoo has is considered worth much–not being one of the most trafficked sites on the Web with a monthly worldwide audience of more than a half-billion people, not having the leading graphical advertising business on the Web, not having the most popular online content, email, calendar offerings and more.

Which means Yahoo (YHOO) has officially dropped down a rabbit hole and is headed to parts unknown.

Thus, here are the various dangers it might now encounter: a buyout by a foreign company or private equity fund, both of which would doubtlessly make much needed cuts in staff and sell off businesses Yahoo is losing in; continued leeching of talent; and even more pressure on Yahoo management from deeply disgruntled investors.

It is now critical that Yahoo CEO Jerry Yang and his less-than-energetic board do something bold and decisive (Layoffs? A merger with AOL? An indication that it will dramatically streamline its businesses? Asset sales when the market recovers a bit, like selling off search to Microsoft?)

Whatever.

Because while the cool stuff Yahoo will be rolling out in the months is terrific, it comes too late to prevent what could turn into an unrecoverable financial tailspin its employees, customers and investors do not deserve.

And, after a lousy year, that would be truly lousy.


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There was a worry before I started this that I was going to burn every bridge I had. But I realize now that there are some bridges that are worth burning.

— Valleywag editor Sam Biddle