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by James Perrin on 23rd June 2011
A week is a long time in the digital sector, and no one is feeling this more than Yahoo or in particular Yahoo’s CEO Carol Bartz. With rumour rife about her getting the boot earlier in the week, the latest twist sees the former search engine linked with the acquisition of Hulu, the online video provider.
Has the threat of being hung out to dry caused Bartz to desperately try and turn things around with this latest rumoured acquisition? Or is this just another yo-yo week for the typically unpredictable internet brand?
Trouble at the Top
Let’s start with the rumour surrounding Bartz’s future at the company. Carol Bartz came to Yahoo in 2009 where she was immediately installed as CEO. Her arrival was part of Yahoo’s plans to turn the flagging former search engine around. After a partnership with Microsoft, who now power their search results, and a streamlining process, or ‘sunset sale’ as it was dubbed [See: Yahoo’s ‘Sunset’ Sale Begins], shareholders regained confidence in the progress of the company.
Fast forward to the present day and those same shareholders are far from satisfied, and even nervous about what the future holds for their investment. The main reason has been a lack of growth in Yahoo’s core products, including content [See: Yahoo Looking to Content to Replace Search Void]. This helps explain the reason for their latest rumoured acquisition, but more of that later.
The other reason for their shareholder’s trepidation has been over the recent saga involving Alibaba and the sale of Alipay. Yahoo are still waiting to be suitably compensated for what was a quick fire sale of a Chinese payment company so that it belonged in the hands of a Chinese national. However, the company have been quiet on the progress made with Alibaba to be properly rewarded [See: Yahoo Cagey Over Alibaba Affair].
Not only that but some of Bartz’s recruiting decisions have been questionable, with the promotion of Prabhakar Raghavan to Chief Strategy Officer coming under particular criticism because of his lack of business experience. So investor and shareholder confidence is low, and a list of potential replacements has been circulating with Fox Digital’s Jon Miller, and even Alibaba’s Jack Ma being mentioned. One possibility would be for Yahoo to ‘do an Apple’ and rehire their existing CEO and founder, Jerry Yang. However rumour is rumour and it appears that Bartz has been doing her best to kick-start a revival herself.
Video Content Investment
So Yahoo have been going through a turbulent time recently, and whilst a potential investment at this time sounds a little off beat – there certainly is some logic in it. The continuation of investing in content, most notably video content fits well with Yahoo’s change of focus.
Reports from the LA Times revealed that Hulu has been the subject of intense speculation over its future ownership. The online video site which streams television programmes has put itself up for sale and earlier this week there was confirmation of an unsolicited offer. Whilst it hasn’t been confirmed that Yahoo was behind the bid, people have begun putting 2 and 2 together (although in this industry that usually adds up to 5).
Video advertising has become increasingly popular and it seems Yahoo were one of the first to see this growing trend [See: Yahoo Flirt with Premier League Football and Foursquare to Kick-start Revival] even if they were a bit too early. The troubles of Yahoo have led to speculation that another investment is on the cards, almost as a last ditch attempt to revive the once great internet brand. As for the outcome, well we will just have to watch this space, but when it comes to Yahoo anything really can happen.