These days, it takes work to keep track of all the chaos surrounding Yahoo! The media giant, whose advertising numbers and market value have been falling, has been all over the news this month. Between legal problems with the Yahoo! fantasy sports service, once-rumored sale of Alibaba, the potential sale of the Yahoo! core business, and murmurs rippling across the Web about CEO Marissa Mayer’s severance package, Yahoo! is making a lot of waves — and none of them are particularly good for the company.
The Rise And Fall Of The Yahoo! Empire
Yahoo! was the place to be in the late 1990’s and had an impressive showing at the height of the dot-com boom, with their stock closing at an all-time high of $118.75 per share on January 3, 2000. Sixteen days later, the corporation also broke records in Japan, with Yahoo! Japan trading at over 101.4 million yen. Although it did manage to survive the dot-com bubble, Yahoo! has been losing ground ever since.
Yahoo! is still the third-most visited site on the Internet, after Google and Facebook, but its share of ad revenue has been on a steep decline for some time. It simply cannot compete with Facebook and Google when it comes to desktop display advertising. Its once robust share of over 15 percent of the display advertising market in 2009 has fallen to a paltry 4.4% forecast for 2015. That’s down even from last year’s tiny 5.1% share.
CEO Marissa Mayer’s goal of making Yahoo! a leader in mobile advertising seems to be for naught, as well. She came on as CEO in the middle of 2012 and was given the very challenging task of bringing the Yahoo! empire back to its former glory. In this time, she’s made some controversial acquisitions, like the purchase of Tumblr in June 2013, but none of her efforts seem to have made enough of an impact to save the media giant.
Mayer Struggles To Retain Control Of The Ship
As of December 4, the Yahoo! discussion turned to the details of Mayer’s severance package. And on December 10, the Wall Street Journal reported: “Yahoo Inc. on Wednesday signaled that its Internet business is up for sale, dealing a blow to Chief Executive Marissa Mayer and setting the stage for what may be the final act of a Web pioneer that failed to reinvent itself in the smartphone age.”
The company also said it would shelve its yearlong plan to spin off its stake in Alibaba group. Investors are in full revolt, executives at Yahoo! are fleeing at depressing levels and of course the finger is pointing at the corporation’s captain. Ad product chief Prashant Fuloria is headed “back to his startup roots” according to Yahoo!
Although Mayer stressed that turning Yahoo! around would take a significant time investment when she came on board, it seems that the popular opinion is finally turning against her in a very real way. In October, she announced new efforts to try to revive Yahoo!, but has yet to release those details. It is known that she’s hired management consultant McKinsey & Co. to help find areas in the company that can be cut. Whether she’s trying to thin down the budget to appease stockholders or increase the efficiency of her overall battle tactics is unknown. All of this turmoil comes in the midst of heated debates surrounding sale of the business. A sale of the whole company is being considered, as are ideas for breaking it up to squeeze more value from the Yahoo! corporation. The board is expected to make a decision about the direction of the sale soon.
The News Gets Worse
As if the falling values, potential changing of the guard and very likely sale of all or part of the corporation weren’t enough, Yahoo!’s also facing an inquisition from the Attorney General surrounding its fantasy sports offerings. In the past, Yahoo! fantasy sports were season-long efforts, allowing fans with intimate knowledge of their games to compete against one another to build superior fantasy teams from real life player profiles. Points were determined based on the results of real games and player statistics over the entire season. However, Yahoo!’s number-one ranking for fantasy sports has become threatened in the last couple of years by websites offering contests based on single games (known as daily fantasy sports). Reluctantly, Yahoo! waded into those waters, offering guaranteed daily fantasy prize pots. That’s where the trouble began. Now, the offering that Yahoo! hoped would breathe some new life into their company is threatening to be yet another nail in their coffin. The Attorney General is currently investigating whether or not these daily fantasy sports events should be considered sports betting, which is illegal in most states, instead of games of skill like season-long fantasy sports.
Change Is In The Air For Yahoo!
What’s new at Yahoo!, it would seem, is that change is in the air in a big way. What this means isn’t yet clear, but in the weeks and months to come, we’re likely to see a lot about acquisitions, mergers and a shuffling of talent within this once (and perhaps future) search leader.