An Interview With Yahoo's Jerry Yang, Part 2: On Opportunities, Carl Icahn and Leadership
BoomTown was a squeaky enough wheel to get Yahoo CEO Jerry Yang to grant a long interview by phone yesterday–just a day after he had announced weak third-quarter earnings results for the Internet giant, caught as others are in the econalypse, as well as layoffs of at least 10 percent of its global workforce.
But instead of being glum, as you might expect, especially after a year of corporate turmoil that would have finally gotten to even Job–let’s review: management upheaval, a Microsoft (MSFT) takeover battle, an attack by billionaire shareholder activist Carl Icahn, tangling with the Justice Department over a pending Google (GOOG) search advertising partnership and more!–Yang sounded surprisingly confident that Yahoo (YHOO) would emerge a winner after all the wrenching change is wrought at the company he co-founded.
I split the interview into two parts (here is the first post on Yahoo’s financial performance, the impact of the bad economy and the layoffs).
Here is the second part, in which Yang talks about acquisition opportunities, although no comment on his talks with Time Warner (TWX) online unit AOL; his relationship with Icahn, who now holds a Yahoo board seat; the status of the controversial Google deal; his take on Microsoft; and, most importantly, why he is still the right person to lead Yahoo.
BT: What about acquisitions? Everyone knows you are talking to AOL, but what else are you thinking about here?:
Yang: I am not going to comment specifically on AOL.
But, in general, when the market is going through what it is going through, we have to be making adjustments all the time, because things are different than they were even three or four weeks ago.
But I like a lot of things we have going for us in the current situation. We have no debt. We have a strong cash position. You have to ask what is going to happen to a lot of companies when there is not a lot more money to be gotten. That changes everybody’s perspective, I think. And we think we can be opportunistic.
We have not bought back stock. Right now our stock is very cheap, but we think having our cash position is more important. We are very focused on scaling, and it is important to be able to be in a financial position to do so if opportunities come up.
BT: And how is your relationship with Carl Icahn going?:
Yang: Carl is fine and he has got a lot on his plate as well. But he has been a very useful person to have on the board and, of course, it is a different role for him than before. For the most part, he is very constructive, but he is still Carl and he doesn’t hesitate to share what’s on his mind.
BT: What is the status of the talks with the Justice Department over your search ad deal with Google?:
I don’t have a lot of new things to say. We’re still talking, as I have said, and hope to get things resolved. We have not started it, but no one has walked away.
BT: What about your relationship with Microsoft; what did you think of CEO Steve Ballmer’s comment last week about doing a search deal?:
Yang: I don’t have anything new to report there either. As we have always said, we are willing to listen to them, to talk to them about anything.
BT: You have been attacked a lot recently for not selling Yahoo to Microsoft, Yahoo’s low stock price and your management of the company–why do you think you are the best leader for Yahoo going forward?:
Yang: I think if you look at what the company is doing and what we have been going through and the story we have been telling, we have done most, if not all, of what we set out to do, starting last year.
My dream is to transform Yahoo as a platform and product company and I think we are on the way to really doing that. And a lot of what we have been doing is starting to translate into value–whether it is our front page, our profiles, our email or our APT ad platform.
And, in this uncertain environment, I think I am absolutely the right person. Times like this require a leader who really understands this company and its customers, and I think I do. The world is a different place today than even a month ago and I think I am the best person to guide Yahoo through this volatile time.