Yahoo's board is considering whether to sell off its internet business -- the core of what it's been since the 1990s -- and find a way to maximize the value of its holdings in Alibaba and Yahoo Japan, according to a Wall Street Journal report. All that's left now is to raise the "going out of business sale" sign over the entrance to the company's headquarters.
It's still officially unconfirmed, but it wouldn't be surprising. Yahoo has been a disaster for a period spanning the tenures of co-founder Jerry Yang's second stint as CEO, Carol Bartz, Scott Thompson, and Mayer, and that doesn't count interim CEOs Tim Morse and Ross Levinsohn. That's a good eight-plus years now.
There have been plenty of attempts to revitalize the company, but everyone has run into the same basic problems. On one hand, it has boasted one of the largest amounts of traffic on the internet across all its properties. Yahoo has a highly recognizable brand. And yet, for too long, Yahoo has been a collection of services and activities rather than a unified concept. People might use Yahoo Mail or go to Yahoo Finance or some other specialty area, but they don't end up having relationships with the entire company.
As was true for her predecessors, Mayer came in facing this fundamental issue. But she, like the others, had to satisfy investors who wanted more revenue, not less. So most of the properties had to stay and more sources of revenue were added, which only increased the basic problem of a company that was cobbled together. It had all the weaknesses of a traditional conglomerate without any of the benefits.
Although some say that Mayer stabilized the company, it needed much more. Quarterly revenue has increased, but at this point is almost exactly what it was when she became CEO. Mayer tried to focus attention on emerging revenue streams that she called her Mavens strategy (for mobile, video, native, and social). But the growth she expected hasn't been enough ultimately to counter the fall in Yahoo's legacy business. And after more than three years on the job, investors expect a turnaround to really be taking hold.
Sometimes a company outlasts its initial concept. In fact, that happens far more frequently than many in business would like to think. The rate at which companies are bumped off the S&P 500, due to being acquired or significantly shrinking in size, has been accelerating and is on the order of 15 years. Yahoo is 20. At this point -- and, frankly, for a number of years (at least since Yang and the board turned down the absolute gift of Microsoft's $44.6 billion acquisition offer) -- it's time for a breakup. Maybe another company can make the pieces work better. Clearly Yahoo can't.