Date
23 January 2017
Yahoo CEO Marissa Mayer (pictured here at a company event) could find her job on the line if she fails to improve the company's prospects.
Yahoo CEO Marissa Mayer (pictured here at a company event) could find her job on the line if she fails to improve the company's prospects.

Why Yahoo’s core business is hopeless and worthless

The market value of Yahoo is around US$30 billion, while the company’s stake in Alibaba is also worth roughly US$30 billion. Given these figures, you don’t need to be a mathematical wizard to figure out that Yahoo’s own business is basically worthless, Lo Jim points out in his tech blog.

In fact, the situation is even worse. Yahoo also holds 35.5 percent of Yahoo Japan, which bears the same name but actually runs a very independent, profitable business. This stake is estimated to worth over US$7 billion. Factoring in this, the Yahoo core operation actually has negative value.

Despite several management changes and reworked business strategies, Yahoo has never really recovered from the blows delivered by Google and even relative upstarts such as Facebook in online advertising.

While the rivals kept increasing their share, Yahoo became something of a bit player.

Compounding the problem, Yahoo also failed to come up with any new business breakthroughs. The situation didn’t improve even as the company made CEO-level changes several times.

As a matter of fact, things deteriorated after Marissa Mayer took the helm three years ago, Lo says. Like the company’s share price, its talent, product and everything else seems to be going downhill.

The late media journalist David Carr raised this issue in New York Times in 2012, in an article titled “Question for a CEO: What is Yahoo?”

Carr was wondering if the trademark ‘Yahoo!’ should be replaced with ‘Yahoo?’ to reflect its loss of direction.

Lo has his own answer to Carr’s question, as he says: “I have a yahoo.com email account. But over the past five years, I have been using that only for junk mail.”

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RC

EJ Insight writer

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