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Yahoo buying Tumblr is not a turnaround story Yahoo buying Tumblr is not a turnaround story
(4 months later)
Yahoo was a junk shop company until its dissident investor, Dan Loeb, got the idea to hire Marissa Mayer as the company's CEO, its fifth since 2011, less than a year ago.Yahoo was a junk shop company until its dissident investor, Dan Loeb, got the idea to hire Marissa Mayer as the company's CEO, its fifth since 2011, less than a year ago.
Because she was from Google (and already hugely rich in her own right), and a woman, and young, and pregnant, this was media story enough to shine a spotlight on her and Yahoo and make it seem like the company had, once again, arrived at a meaningful point of departure.Because she was from Google (and already hugely rich in her own right), and a woman, and young, and pregnant, this was media story enough to shine a spotlight on her and Yahoo and make it seem like the company had, once again, arrived at a meaningful point of departure.
The fact that Yahoo is, by wide agreement and confirmed by ever-fading results, a company long past its prime and purpose was, suddenly, obscured. Rather, the new CEO was something like a new president of the United States, with all possibilities before her, and everything dependent on her charismatic leadership. Yahoo's deep, encumbered, long-defeated, seen-it-all, done-it-all, culture be damned.The fact that Yahoo is, by wide agreement and confirmed by ever-fading results, a company long past its prime and purpose was, suddenly, obscured. Rather, the new CEO was something like a new president of the United States, with all possibilities before her, and everything dependent on her charismatic leadership. Yahoo's deep, encumbered, long-defeated, seen-it-all, done-it-all, culture be damned.
This idea of the blank page, and second chance (actually Yahoo has had an almost infinite number of chances), was a media illusion, orchestrated by the technology press – largely lead by Kara Swisher, a figure of influence and intrigue in the technology business, and the editor of All Things Digital, which broke the story last week of Yahoo's imminent billion dollar level acquisition of Tumblr.This idea of the blank page, and second chance (actually Yahoo has had an almost infinite number of chances), was a media illusion, orchestrated by the technology press – largely lead by Kara Swisher, a figure of influence and intrigue in the technology business, and the editor of All Things Digital, which broke the story last week of Yahoo's imminent billion dollar level acquisition of Tumblr.
Yahoo, before Loeb and Mayer, was a Silicon Valley company that had been superceded by at least two tech generations. All of its disparate features and functions, each added to or bolted on to the company over the years in desperate attempts to make it relevant again, are performed better by other companies.Yahoo, before Loeb and Mayer, was a Silicon Valley company that had been superceded by at least two tech generations. All of its disparate features and functions, each added to or bolted on to the company over the years in desperate attempts to make it relevant again, are performed better by other companies.
Its constant management turmoil has forged a bureaucracy as devoted to protecting itself with implacable resistant and mindless servility as great as any in the top-down corporate world (Yahoo in fact resembles the 1950s yes-man corporate world much more than a flattened, entrepreneurial tech model). In the face of everybody else's better ideas and better run enterprises and newer technology, most of what the company has done in the last 10 years is lose market share.

What it became, principally, was a traffic hub. For no positive reason, in fact largely for a series of negative reasons – inertia, indifference, mindless familiarity, its legacy place in the click stream, its truly staggering collection of porn (its secret sauce from early internet times has been to be the porn search engine of choice) – it attracts vast amounts of traffic, which is inherently worth something.		Its constant management turmoil has forged a bureaucracy as devoted to protecting itself with implacable resistant and mindless servility as great as any in the top-down corporate world (Yahoo in fact resembles the 1950s yes-man corporate world much more than a flattened, entrepreneurial tech model). In the face of everybody else's better ideas and better run enterprises and newer technology, most of what the company has done in the last 10 years is lose market share.

What it became, principally, was a traffic hub. For no positive reason, in fact largely for a series of negative reasons – inertia, indifference, mindless familiarity, its legacy place in the click stream, its truly staggering collection of porn (its secret sauce from early internet times has been to be the porn search engine of choice) – it attracts vast amounts of traffic, which is inherently worth something.
Several years ago, Microsoft almost bought Yahoo. That deal, which would have represented a reasonable outcome for the company, was scuttled by management infighting and incompetence. This lead to the attention of outside, "activist" investors, and the eventual takeover by Loeb who successfully installed his supporters in a key block on the board.Several years ago, Microsoft almost bought Yahoo. That deal, which would have represented a reasonable outcome for the company, was scuttled by management infighting and incompetence. This lead to the attention of outside, "activist" investors, and the eventual takeover by Loeb who successfully installed his supporters in a key block on the board.
Loeb, an inveterate meddler and control freak (more kindly called an "activist investor"), who is now pursuing Sony and earlier this year was involved in public fisticuffs over Herbalife, knows little about technology or actually about operating a company. His mission is to maximize his investment and get out: pump and dump.Loeb, an inveterate meddler and control freak (more kindly called an "activist investor"), who is now pursuing Sony and earlier this year was involved in public fisticuffs over Herbalife, knows little about technology or actually about operating a company. His mission is to maximize his investment and get out: pump and dump.
Although Loeb was responsible for hiring Meyer, dispensing with interim CEO Ross Levinsohn, who had been installed after CEO Scott Thompson was pushed out for faking his resume, and even though it is the intrusive Loeb to whom Meyer effectively reports, he has been largely absent from all the coverage of the Tumblr acquisition and the Yahoo reinvention.Although Loeb was responsible for hiring Meyer, dispensing with interim CEO Ross Levinsohn, who had been installed after CEO Scott Thompson was pushed out for faking his resume, and even though it is the intrusive Loeb to whom Meyer effectively reports, he has been largely absent from all the coverage of the Tumblr acquisition and the Yahoo reinvention.
The story line is that Yahoo, with new vigor, and in a renaissance of strategic vision, is remaking itself. Rather then: Run by an activist investor, who specializes in stock-moving headlines and diversionary activity, Yahoo is trying to buy anything that will, however momentarily, create new attention around the company.The story line is that Yahoo, with new vigor, and in a renaissance of strategic vision, is remaking itself. Rather then: Run by an activist investor, who specializes in stock-moving headlines and diversionary activity, Yahoo is trying to buy anything that will, however momentarily, create new attention around the company.
The Tumblr acquisition, greeted by near universal oohs and ahhs, ought more obviously to be seen in light of the circumstance that Yahoo, over the last year, has basically tried to buy anything it possibly could. Only a few weeks ago it was rebuffed in its efforts to buy the French-owned Dailymotion. Spurned by the French government, it ricocheted to Tumblr.The Tumblr acquisition, greeted by near universal oohs and ahhs, ought more obviously to be seen in light of the circumstance that Yahoo, over the last year, has basically tried to buy anything it possibly could. Only a few weeks ago it was rebuffed in its efforts to buy the French-owned Dailymotion. Spurned by the French government, it ricocheted to Tumblr.
Of note, Loeb's key lieutenant, who he installed on the Yahoo board, is one Michael J Wolf, whose career, given our similar names and involvement in the media business, I have been forced to follow (I often get his mail and phone calls; on occasion we have shown up for the same lunch date). Wolf, a sometime author and consultant without portfolio, is what I would call one of the most well-known snake oil salesman in the media business. For years he advised media conglomerate CEOs on strategies that might create short-term buzz (while, as has often happened, resulting in a long-term drag on value). Wolf has now, on no basis whatsoever, self-styled himself as a new media guru.Of note, Loeb's key lieutenant, who he installed on the Yahoo board, is one Michael J Wolf, whose career, given our similar names and involvement in the media business, I have been forced to follow (I often get his mail and phone calls; on occasion we have shown up for the same lunch date). Wolf, a sometime author and consultant without portfolio, is what I would call one of the most well-known snake oil salesman in the media business. For years he advised media conglomerate CEOs on strategies that might create short-term buzz (while, as has often happened, resulting in a long-term drag on value). Wolf has now, on no basis whatsoever, self-styled himself as a new media guru.
In the end, Marissa Meyer is merely an instrument of Loeb's and Wolf's bright ideas for getting out of Yahoo as fast and as profitably as they can. Hence, her billion dollar deal for Tumblr, so that Yahoo might join the social networking business and buy itself some cool. Forget the fact that nothing in Yahoo's muddled experience and questionable competence suggests it knows anything about the social business or has any sensibility that has anything to do with cool, not to mention that it has had a long history of killing the acquisitions it has made.In the end, Marissa Meyer is merely an instrument of Loeb's and Wolf's bright ideas for getting out of Yahoo as fast and as profitably as they can. Hence, her billion dollar deal for Tumblr, so that Yahoo might join the social networking business and buy itself some cool. Forget the fact that nothing in Yahoo's muddled experience and questionable competence suggests it knows anything about the social business or has any sensibility that has anything to do with cool, not to mention that it has had a long history of killing the acquisitions it has made.
Here we are.Here we are.
Kara Swisher and the rest of the technology press is orgiastic about large amounts of money changing hands. And Dan Loeb is staging his exit.Kara Swisher and the rest of the technology press is orgiastic about large amounts of money changing hands. And Dan Loeb is staging his exit.
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