Hindenburg, meet Titanic

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cgarison
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Hindenburg, meet Titanic

Post by cgarison »

And if you thought the whole (AOL)TimeWarner deal was the mess of the century, boy do we have a proposed merger that makes that deal look like a walk in the park.

http://www.theregister.co.uk/2014/09/27 ... yii_aolii/
  • Yahoo! dumps! thing! that! made! it! Yahoo! and! told! to! bed! AOL!

    A hedge fund is urging Yahoo! to form a "strategic combination" with fellow internet dinosaur AOL – just as Yahoo! announced it was killing off its founding feature, created about 20 years ago.

    In an open letter to Yahoo! CEO Marissa Mayer, investment house Starboard Value asked her to consider making a number of moves it thinks will produce better payouts for shareholders.

    Among the ideas outlined in the letter would be a possible merger with AOL. The investment firm, which holds a stake in Yahoo!, said it thinks a Borg'd Yahoo!-AOL would be a force to be reckoned with online.

    "Based on our analysis, we believe that a combination of Yahoo and AOL could offer synergies of up to $1 billion by significantly reducing the cost overlaps in their Display advertising businesses as well as synergies in corporate overhead," the letter reads.

    "Importantly, we believe the combined entity would be able to more successfully navigate the ongoing industry changes, such as the growth of programmatic advertising and migration to mobile."

    The letter goes so far as to suggest that Yahoo! could even take AOL's name and shut down most of its operations, if need be.

    AOL, of course, was the subject of one of the most disastrous mergers in history. In 2000, the company's $160bn deal with Time Warner marked the high point of the dot-com boom. Over the next ten years, it would prove to be a dreadful move for both sides as AOL's dialup business eroded with the rise of broadband.

    Yahoo! has similarly been wandering the web's wilderness after it was overthrown by Google. Efforts to relaunch the firm have stumbled as a parade of CEOs, including Terry Semel, Jerry Yang and Carol Bartz, have tried to return the biz to its former glory.

    Though Starboard is all for an AOL tie up, the company wants to slam the brakes on other acquisitions. The hedge fund said it would seek to halt Yahoo!'s strategy of adding new brands – remember, it owns Flickr and Tumblr – a tactic that Starboard claims has cost Yahoo! $1.3bn in the past two years.

    One of the primary problems, says Starboard, is that the core of Yahoo!'s web business is still failing to generate any money.

    "Although Yahoo's stock price performance over the past few years has been strong, we believe the main reason for this performance has been the significant increase in value of Yahoo's stake in Alibaba," the firm said.

    "The appreciation in Alibaba's valuation, which Yahoo purchased in 2005, has masked the poor performance of Yahoo's core business."

    It seems, perhaps, that Yahoo! is already thinking along those lines. The company today announced the closing of three products: Yahoo Education, Qwiki and the Yahoo Directory.

    Directory was Yahoo!'s first ever product and the company's core business in its early days, starting life as "Jerry's Guide to the Web." Yahoo said that it would shut down the service effective December 31 this year.

    As for the letter itself, Yahoo appears to have politely declined Starboard's suggestions.

    "Going forward, we have great confidence in the strength of our business," Meyer said in a company statement.

    "The management team and the Board of Directors remain committed to building value for all shareholders through the continued execution of our strategy, investing in products that will drive sustainable growth: search, communications, digital magazines and video."
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Re: Hindenburg, meet Titanic

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Yeah, there's really no news, here....just more armchair-quarterback stuff every armchair quarterback has been armchair-quarterbacking about Yahoo or AOL for years.

But, actually, this has a new dumbth to it -- coming together under the "AOL" name. In this era in which the the US has become very much less relevant to the future and increasingly disliked by politicians and populaces around the world, DON'T consolidate under "America"-something when you could use the universally-pronounceable, fun-sounding-in-most-any-language "Yahoo!"
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Re: Hindenburg, meet Titanic

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The sad part of this deal is that an "activist investor" could acquire a 5% share of Yahoo! and literally wreck the company and maybe even another willing victim/dance partner. After the Alibaba IPO, Yahoo! is now setting on more assets than the stock is valued so I am sure it is a race on Wall Street to see who can get the shares of the company/seats on the board of directors to start scuttling this ship and take the cash that is laying around in its bank accounts. This is rather sad because it appears that Marissa Meyer may just be on the verge of developing the formula needed for profitable mixture of self generated media along with partner deals to make the Yahoo! successful (again.)
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Re: Hindenburg, meet Titanic

Post by Big Media »

I've had a Yahoo! email address for a long time now, but whenever I see an email address that ends in aol.com, I think "How antiquated! Who still uses AOL?" :mrgreen: :oops:
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Re: Hindenburg, meet Titanic

Post by Lester »

Big Media wrote:Who still uses AOL?"
They still have 2.5 million paying customers.
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Re: Hindenburg, meet Titanic

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I still use AOL for about half of my email. I would use it for all of my email, but I purchased a NexusOne back in 2010 and that changed some parts of how I do email. If it had not been for Android forcing me to gmail, I would still be using AOL for 90% of my email.
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Re: Hindenburg, meet Titanic

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I still have an AOL address....it's mainly for stuff I don't really want to look at or even get but, technically, have to receive......
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Re: Hindenburg, meet Titanic

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I think you guys missed my point. I use Yahoo, which is, seemingly, just as antiquated as AOL. Still, I am shocked that so many still use AOL e-mail and that anyone would pay for that abuse.

I still remember using their 200 hours free (or whatever) CDs back in the dial up days. If I couldn't afford to pay my RamLink or Prodigy bill, I would just grab one of those suckers and create another user name. I must have had 50 different user names with that company over the years.
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Re: Hindenburg, meet Titanic

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Big Media wrote:I think you guys missed my point. I use Yahoo, which is, seemingly, just as antiquated as AOL. Still, I am shocked that so many still use AOL e-mail and that anyone would pay for that abuse.
The email is free...they're paying for the real service! Dial-up and everything.
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Re: Hindenburg, meet Titanic

Post by Lester »

Big Media wrote:I still remember using their 200 hours free (or whatever) CDs back in the dial up days.
CDs? Newb.

:-)
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Re: Hindenburg, meet Titanic

Post by Big Media »

Lester wrote:
Big Media wrote:I still remember using their 200 hours free (or whatever) CDs back in the dial up days.
CDs? Newb.

:-)
Heh!
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Re: Hindenburg, meet Titanic

Post by cgarison »

Well there is even more to this story, but I expected this information to be dragged out into the open.

Activist Pushing AOL-Yahoo Merger Actually Owns Shares In Both
http://www.businessinsider.com/activist ... th-2014-11
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