Yahoo is giving its CEO Marissa Mayer a $23 million “golden parachute” and $3 million in cold hard cash in the hope that she might go away with the least amount of fuss.
The search engine has named Thomas McInerney, a former chief financial officer of IAC, as the bearer of the Yahoo poisoned chalice once the merger with Verizon becomes official.
Yahoo said that after it completes the sale of its core search business to Verizon and Mayer and co-founder David Filo step down as board members of Altaba – the new name for the remaining holdings.
Mayer’s golden parachute is the large payment for top executives if they lose their position because of a deal, would include $19.97 million in equity and more than $3 million in cash, according to a regulatory filing.
It would kick in if there is a change in control, as will be the case in the deal, and she is terminated “without cause” or “leaves for good reason” within a year.
There cannot be many people who would be upset at getting $26 million not to go to work.
Yahoo is to rename itself Altaba and Chief Executive Officer Marissa Mayer will quit after the closing of its deal with Verizon.
Yahoo has a deal to sell its core internet business, which includes its digital advertising, email and media assets, to Verizon for $4.83 billion.
Five other Yahoo directors would also clean out their desks after the deal closes, Yahoo told regulators. The new company also named Eric Brandt chairman of the board.
The remaining directors will govern Altaba, a holding company whose primary assets will be a 15 percent stake in Chinese e-commerce company Alibaba and 35.5 percent stake in Yahoo Japan.
The terms of that deal could be amended – or the transaction may even be called off – after Yahoo last year disclosed two separate data breaches; one involving some 500 million customer accounts and the second involving over a billion.
Verizon executives have said that while they see a strong strategic fit with Yahoo, they are still investigating the data breaches.
Software king of the world Microsoft is chatting to equity firms considering bids for Yahoo.
Apparently Vole might be willing to offer “significant financing” for their efforts. It is all up in the air at the moment as Microsoft is still chatting to the right people.
Microsoft’s partnerships and acquisition strategy head Peggy Johnson is also part of the effort to finance a possible Yahoo buyer.
Microsoft does not want to buy Yahoo, however it does want a good relationship with Yahoo’s buyer – after all it has a lot ofits business tied up in the outfit.
Yahoo launched an auction of its core business in February after it shelved plans to spin off its stake in Chinese e-commerce giant Alibaba Group.
In an interview with Reuters in February, Yahoo Chief Executive Officer Marissa Mayer said the company will entertain offers as they come but its first priority is a turnaround plan.
Yahoo faces increasing pressure from shareholders and investors to sell its core business instead of going through a spinoff that would separate the company from its multibillion-dollar stakes in Yahoo Japan and Alibaba Group
Activist hedge fund Starboard Value on Thursday said it would nominate nine candidates for the board in an attempt to overthrow the entire board of Yahoo including its chief executive.
Starboard has been pushing for changes at Yahoo since 2014 and owns about 1.7 percent of the company.
Yahoo is about to release its next glorious turnaround plan after releasing quarterly earnings next month.
It is not clear what this cunning plan actually is and if it includes its current CEO Marissa Mayer. Her cunning plans including drastic staff cuts have so far failed to turn the company around.
The company continues to resist investor calls to explore a sale of its core Internet assets and has rebuffed several potential buyers for its core Internet assets, including private equity firms.
Yahoo wants to gauge shareholder reaction after presenting its strategic vision during the earnings conference call, one of the people said.
Yahoo said last month it would pursue a tax-free spinoff of the core Internet business, which could take at least a year.
The company has abandoned plans to spin off its stake in Alibaba and announced it would instead spin off other assets, including its stake in Yahoo Japan, into a new company.
Yahoo might find it hard to avoid a formal sales process for long, however, as investors, including Starboard, push more aggressively for a sale.
Other investors, including Canyon Capital Advisors and Mason Capital have also been urging Yahoo to sell its Internet business.
Yahoo investors have a one-month window to nominate a slate of board members and the end of next month and Starboard has indicated in its last two letters to the board it is prepared to launch a proxy contest.
It seems that Yahoo is running out of ideas about how to turn itself around and has called in the bean-counters at management consulting firm McKinsey & Co to help.
McKinsey will help Yahoo decide which units to shut, sell or invest in. The search outfit is preparing to spin off its 15 percent stake in Chinese e-commerce giant Alibaba.
Yahoo has been struggling to boost revenue from ad sales in the face of stiff competition from Google, Microsoft and Facebook.
Under Chief Executive Marissa Mayer, Yahoo has been trying to revive its core media and online advertising business by spending more to get users on its websites. However not much appears to have happened.
After deducting fees paid to partner websites, Yahoo’s revenue fell to $1.0 billion in the third quarter from $1.09 billion last year, and the company forecast a drop to $920 million-$960 million in the current quarter.
Top executives at Yahoo have been asked by Mayer over the last month to make three to five-year commitments to the company.
Several top executives, including Media head Kathy Savitt and Chief Development Officer Jackie Reses, have exited in the last couple of months.
Rumours claim that at least two people reporting directly to Mayer will also to leave the company.
Search engine Yahoo has been doing its best to put some Orwellian spin on the sackings of employees as part of its restructuring.
Instead of calling the sackings by their usual euphemism of “redundancies”, Yahoo CEO Yahoo Marissa Mayer, called Its layoffs a ‘Remix’.
A remix does not have any connotations of anything bad happening. It sounds like you just replaced a few marshmallows with some vanilla whirls before taking them to the counter of Woolworths when you were a kid. There is no symbolism of tearful staff exiting the building with their belongings in a photocopy paper box trying to navigate the streets staring through the leaves of a the plant which had sat on their desk for 10 years.
Staff at Yahoo are not stupid. They know that the company is to search engines what Twilight was to vampire horror, Despite a renewed focus on mobile and an influx of skilled developers and engineers, the company still struggles to define its place on the modern tech scene.
Yahoo CEO Marissa Mayer, in a conference call with reporters and analysts, referred to the net layoffs of 1,100 employees in the first quarter of 2015 as part of a “remixing and pivoting” of the company.
Pivoting is another method of using a “nice” word when a darker word is more apt. Mayer is turning around a company. Pivoting gives the image of a ballet dancer making a slight tilt before doing a pirouette. In fact if Yahoo was just pivoting it would not solve anything.
Mayer’s “remix and pivot” is an insult to her staff, whom she expects to follow her though what is a bloody miserable time. Having been through a couple of restructurings, the last thing that employees want to hear is that their pain has been dumbed down and sanitised.
If Mayer is given the boot by her impatient board or shareholders, it is unlikely she would call it a remix.
Search outfit Yahoo claims to have fixed one of its biggest problems – all the talented staff wanted to work for other companies.
When CEO Marissa Mayer took charge she moved swiftly to fix a lack of talent in the company by buying companies and drafting their employees to work for Yahoo. The biggest buy out was the $1.1 billion purchase of blogging service, Tumblr.
Now Yahoo thinks the problem is solved and its talent crisis is over. Chief financial offer, Ken Goldman, who spoke at a Morgan Stanley investor conference in San Francisco that in the old days, companies did not want to be bought by Yahoo, because they did not want to work there. That’s not the case any more.”
Goldman’s statement is backed up by the company’s annual report, which claims that it received more than 340,000 job applications in 2013 which was double the number in 2012. Yahoo is the third-highest-paying company in Silicon Valley for engineers last year, behind Juniper Networks and LinkedIn.
But Yahoo is not considered a great place to work. It did not make the recruitment site Glassdoor’s list of the 50 best places to work.
Mayer hacked off staff by refusing to let people work from home and for scheduling weekly meetings on Friday afternoons. However, Goldman said that she had changed the attitude and morale at Yahoo.
Yahoo chief operating officer Henrique de Castro who Chief Executive Officer Marissa Mayer headhunted from Google shortly after she took over has mysteriously cleaned out his desk.
The search engine has not given a reason for his departure but he appears to have been fired by Mayer.
In a staff email Mayer said that during “my own reflection”, she made “the difficult decision” that COO, Henrique de Castro, should leave the company.
It is a little worrying that anyone should make decisions while looking at their own reflection.
At the time of de Castro’s hiring, Mayer was building a management team to try to revive flagging sales and traffic, and cited de Castro’s internet advertising expertise as a key asset.
But he was known for his tough talk and a strong personality, and a bulky compensation package totalling $58 million when he was hired. How is he going to spend it all before he croaks?
The fact that Mayer managed to lure an executive from Google was applauded as a sign that the new CEO had re-inspired confidence in the company.
However de Castro failed to do much other than collect his salary. Yahoo’s revenue growth has remained moribund. Revenue has declined between five percent and seven percent year-over-year in each of the first three quarters of 2013.
Ironically he will get severance benefits including equity awards, according to the filing.
De Castro could not immediately be reached for comment as he was trying to pack his rubber plant.
Yahoo’s beleaguered board has written a rumoured $1.1 billion cheque to buy the social blogging site Tumblr.
The Tumblr deal was rumoured last week and it looks like it is accurate if the Wall Street Journal‘s secret special sauces are correct.
The deal could be announced today. Yahoo already has an event scheduled for today in New York on the basis that if you make an announcement there you can make it anywhere.
Yahoo CEO Marissa Mayer become interested in the site only a couple of months ago, but sees the Tumblr purchase as a way to big inroads into social media and boosting revenue growth.
The news is supposed to be an antidote to other rumours that there are dark things going on at the top of Yahoo’s executive ladder. Key people have been departing from Yahoo’s mobile team and there are other portents of doom.
Tumblr, too, is seen as being in trouble. Yahoo’s $1.1 billion offer would normally have been sniffed at as being far too low. But other rumours suggest that Tumblr may be looking at a fast-depleting cash pile, which again gives it good reason to sell.
Of course there are some users who are threatening to depart from Tumblr if the Yahoo deal goes through and visitor growth to the site appears to be flat or declining slightly in 2013, so the deal might not be great for Yahoo.
There are always those who threaten to leave a site if its ownership changes hands. Instagram also had shedloads of users claiming they were going to shut down their accounts and depart for good when Facebook took it.
What is a little strange is how Yahoo is affording the buy. It only had $1.2 billion cash on hand as of its most recent quarterly earnings so this could be the last of its big spends.
Yahoo chief exec Marissa Mayer said the company’s search partnership with Microsoft is not delivering the market share gains or the revenue boost that it should.
Yahoo and Vole signed a 10-year search partnership in 2010, hoping their combined efforts could mount a more competitive challenge, but Mayer told shareholders that the partnership has not lived up to expectations.
According to Reuters, Mayer said that one of the reasons that Yahoo entered the alliance was to collectively grow share. However, what appears to have happened is that Microsoft and Yahoo ended up trading share with each other.
Microsoft had 16.3 percent share and Yahoo had 12.2 percent share in December, a reversal of two years earlier when Yahoo’s US search share was 16 percent and Microsoft had 12 percent share.
That does not mean that she wants out of the partnership. Mayer said that there needed to be improvements to see money flow between the two better.
Mayer said that Yahoo knew it could work because other competitors in the space do it rather well.
Meanwhile, Mayer said she planned to cut a sprawling lineup of mobile apps and reiterated her focus on enticing consumers to spend more time on Yahoo’s online properties, in order to display more money-making ads.
She said that Yahoo’s biggest problem is impressions and if the outfit can grow impressions, growth will happen.
We think we understand what she means. A bad impression can really stuff up an organisation. We had an editor who did a terrible Groucho Marx and we just did not want to come to work.