IAC separated its vast arsenal of assets into five companies.
Yahoo! is under pressure to streamline its portfolio of assets, too.
The need for clarity and focus is not limited to new media companies only. Venerable 121-year old retail empire Sears is planning to give a lot more autonomy to its various units, as well.
Sears Holdings Corporation, the publicly traded parent of Kmart and Sears, Roebuck and Co., is the nation’s fourth largest broadline retailer with over $50 billion in annual revenues and approximately 3,800 full-line and specialty retail stores in the United States and Canada.
Maybe it’s time to spin off StreetMojo.com, MetaMojo.com from WatchMojo.com?
The financial crunch might force a bunch of mergers and acquisitions, but after a heady period of consolidation in numerous other industries, it is possible that we might see some divestments, too.
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WatchMojo NewsletterYahoo! is contemplating laying off 20% of its workforce, maybe.
It turns out that CEO Jerry Yang is not actually going to lay off 20% of the workforce, rather, depending on how the stock market reacts to Yahoo!’s Q4 2007 report, then Yang and the Board will make a call.
Hmm… as a Yahoo! stockholder, this is lunacy and it makes me angry at Yahoo!, Yang and the Board (if it is true).
Like a band-aid, Yang needs to rip this off with little hesitation or trepidation. It is long overdue.
Unlike a band-aid solution however, a 10-20% layoff is just what the doctor recommends for long-term health.
As I mentioned earlier this morning, this entire rumor is odd, but suggests a few things:
- For Yang and YHOO’s mgmt to think that the stock might edge up after the reports suggest that Q4 was relatively good. Otherwise, they would definitely time the layoffs with the report. So net-net, that is a positive.
- But, that is not how the market works. This rumor, true or not, is out there, the information should make the stock bump up a bit (no big feat given that YHOO is now a $27B company). I fear that if the company backs away from the layoffs, the market will punish the stock. Unless, of course, traders understand this is merely a rumor about the thought of layoffs.
My two sense: YHOO is a great company, but a mature one. It’s about time Yahoo! cleaned up shop, especially at the very top… in the middle and at the bottom too. The company’s fat, slow, it’s time to go.
Yahoo! could very well survive and thrive alone - online ads will double in 3 years and YHOO is the biggest site online - but it is a bit troubling that Jerry Yang and the Board are seemingly going to let the market decide the fate of the company after the results are reported. I sure hope that is a rumor and not what the company actually plans to do.
You don’t manage according to Wall Street, Jerry, you just don’t!
I have been critical of Mark Zuckerberg and his brain trust at Facebook, yes.
But I’ve also been doled out a lot of praise. Sit down folks, this one is a love-fest.
When Facebook turned down offers of $800M, $1B, $1.6B, $2.3B by Viacom, Yahoo! and Google, people thought Mark et al. were crazy. What was crazy, ultimately, was the $240M investment Facebook snagged at a $15B valuation in 2007.
Mind you, this was not an exit for $15B, but an investment of $240M at a $15B valuation. While the move can come back (and probably will) to haunt Facebook (who would actually pay $15B for Facebook today?) it will also reassure Facebook’s financiers that MSFT will at least consider buying Facebook for something in the future if the future is not so rosy.
Today comes the rumor that Nokia and Facebook are working on a partnership, and like many corporate development deals come as a result of business development talks, Nokia might invest in Facebook, too.
This is smart: it adds one more deep-pocketed company to join the $15B round (bear in mind MSFT’s deal stipulated that Redmond would invest at Facebook’s next funding at that valuation, so the round is open, and Germany’s Samwer brothers and Hong Kong’s Li Ka-Shing have since joined).
Why this is key is that even if Facebook does not / cannot exit in an IPO at a level that would satisfy the $15B valuation, it now has not one (MSFT) but two (MSFT and Nokia) that can pull the trigger and one day buy Facebook for a price tag that would make Peter Thiel, Mark Zuckerberk, Jim Breyer, David Sze save face.
US Video advertising will surpass $1B in billings in 2008. That is a psychological mark more than anything else as video advertising overtakes search advertising in the upcoming decade. It might sound impossible now, but the day Web ads overtake TV ads, it won’t be on the strength of search ads, but rather, the titanic shift of marketing dollars from TV to the internet.
Over the past few years, marketers have began to experiment with video advertising, or rather, advertising around video content. A lot of that has been via pre-rolls, but pre-rolls - while they will remain an important component in years to come - are no different than popunders and popups. Over time, we’ll need something better and less intrusive for users to render the format effective. I suggested maybe the PiP will make a dent, who knows?
In the upcoming years, expect sponsorships to be a popular format. Today Fast Company announced that its upcoming FastCompany.tv programming won’t run pre-rolls, but will be monetized via sponsorships.
To understand why, let’s examine a few factors.
Advertisers look for clickable and unclickable formats.
They also look at tracked, and untracked placements. Mind you these days online everything can be tracked.
But given that Fast Company has an established brand and will be rolling out its video initiative from scratch, it has a lot to lose by selling anything on a tracked and clickable basis. But specifically because Fast Company has brand equity and host Robert Scoble has a following and experience with sponsorship-based programming, this is a wise way to launch into the medium.
As a video producer myself, I welcome this because it will encourage other marketers to give sponsorships a try and drop the rhetoric over pre-rolls. After all, marketers are great thinkers sometimes, but occasionally you will walk into an ad agency and suggest something that is outside of the box and they will look at you like you are an alien.
This is one storyline worth keeping an eye on.
In other words, why Fast Company would want this is a no-brainer, but for marketers to embrace it would be welcome.
As they would say, a small step for publishers, a giant leap for marketers.
GigaOm and Center Networks commented today on the history of social networking. Reading some of the comments on both posts, I realize just how subjective social networks are, as the name would imply.
Facebook was clearly the company of 2007 and social networking remains a very hot space in 2008, no doubt. But much the same way that Friendster was trumped by MySpace in 2005 and to some extent MySpace’s mindshare was stolen by Facebook in 2007, I am not sure if Facebook will remain as relevant in 2009 as it was in 2007 (I presume it will to varying degrees in 2008).
But ultimately, for the very same reasons that some criticize MySpace today, Facebook has become a victim of its own success. Here are five reasons why Facebook will fare no differently than previous leaders in the social networking space:
Mass vs. Niche
If you look at the evolution of social networks, niche has always trumped mass. MySpace initially blossomed (at Friendster’s expense) because it was used by many artists, first the independents, then the mainstream ones. Because more or less everyone (big time generalization, I agree) likes music, then that served as a common interest which drew in the masses…
MySpace today and in the future will be a largely entertainment oriented media platform. This is not a bad thing, we’re just saying that this is where its future and focus should be.
Facebook, in turn, began to grow because it was a student-only tool. As the name implies, it was a directory of people. When it opened up to non-students in Fall 2006, naturally all recently-graduated-students (myself for example) signed up. Facebook’s PR team consistently highlights that the 25-34 demographic is the fastest rising one… but guess what, by landing all of these “old fogeys” the student crowd begins to find it creepy… let alone once your parents, uncle and teachers start to have pages too.
Don’t get me wrong, I am not arguing that Facebook’s utility falls to zero by opening up, I am simply saying that by opening up, the site diluted its value proposition and suffers slowly, but surely.
If you doubt me, imagine if LinkedIn was littered with every employee from every industry in every country. At first you think “great” but is it really? LinkedIn’s value lies in serving executives only.
Cr-App Overload
After Facebook opened up its network to all, inevitably, it opened its platform to all developers. Initially I said “be careful what you ask for” and to this day I wonder if this is smart. Slide is one example of a company who has parlayed its succedd to a $500M valuation, but it’s too early to cash in the check just yet. Slide will have a very challenging time monetizing its audience. As someone with more experience told me: “it’s smoke and mirrors”.
But because of Facebook’s massive audience, developers rushed to create applications… and I could care less what any fanboy says: Facebook has become a landfill of cr-app as a result. The regular invites to connect get lost amongst all of the invites to useless applications…
Privacy
A lot of people eventually realize that narrowcasting your life to others is not smart. It’s one thing for you to know who sees your profile, it’s another for others to see you, privately.
This is a privacy issue at the first level. More importantly, there are privacy issues with Facebook’s platform, Beacon.
Monetization
The biggest challenge, no doubt, will be with regards to how Facebook will monetize over time. I’ve covered this aplenty, but Beacon has so far been a failure and Facebook has some serious questions to ask on this front.
Management & Leadership
Mark Zuckerberg is a great talent. There is no doubt that Zuckerberg deserves a special spot in the history of the Internet, but he has also demonstrated a lack of judgment - or simply poor judgment - a handful of times.
His communications skills are perhaps his Achilles Heel… and if Facebook is aiming for an initial public offering (IPO) as an exit, then you can imagine that this will indeed be his undoing as shareholders will add or erase billions of dollars in market capitalization based on every breath he takes.
I am not sure if Mark’s days as CEO are numbered, but eventually, the Board will consider bringing in a media-oriented, advertising-experienced person (maybe even a female).
Let me be clear: I am not saying Facebook is doomed or anything like that. With $340M in funding, a partnership with the world’s most valuable technology company and backed now by strong partners in Germany and China, Facebook will remain a force for some time to come… but it will not remain the darling it is within 12-24 months and in many ways, the $15B deal it did with MSFT will surely come back to haunt it before long.
Update: This should be Six reasons… fitting for Six Degrees of Separation, since Facebook is the Database of Connections.
Anyway, reason 6 simply is Common Sense.
99% of the people we lose touch with, we do so on purpose. Yet Facebook allows us to reconnect. The problem is that over time, we reconnect with people we really do not even know… in 1% of cases, this is welcome and actually creates new relationships… but as we end up with hundreds of connections, the incessant apps, the news feed, the wall posts and all that other noise makes Facebook a junkyard not worthy of any sane person’s time. Inevitably, 20% of people might create 80% of the noise on Facebook, but for Facebook to succeed, it takes the remaining, mainstream 80% that advertisers actually need to reach. Facebook - very much like MySpace - will fail as a result of its success. And bear in mind, with Facebook, right now, the definition of success is an exit considerably higher than $15B.
On Friday I wrote “Memo to Yahoo!: Barbarians at the Gate” outlining all of the various options that would make onlookers (investment bankers, private equity, shareholder activists, Redmond, etc.) salivate, including:
- status quo (a $100B market cap by 2010?)
- merger with eBay
- merger with Viacom
- merger with CBS
- acquisition by/merger with Microsoft
- taken private
- sale to AT&T
- can Google buy Yahoo!?
- Spin off ad network unit
Then the WSJ penned an article calling for a shakeup at Yahoo! This morning Henry Blodget is suggesting that long-overdue layoffs are in the works at Yahoo!
While Blodget’s tip was anonymous, Paid Content’s tip was not, and they echo the same: layoffs, maybe. The thinking is they’ll report earnings on the 29th, then depending on the stock, they will make the call about layoffs.
Hmm… here’s what I think:
- For Yang and YHOO’s mgmt to think that the stock might edge up after the reports suggest that Q4 was relatively good. Otherwise, they would definitely time the layoffs with the report. So net-net, that is a positive.
- But, that is not how the market works. This rumor, true or not, is out there, the information should make the stock bump up a bit (no big feat given that YHOO is now a $27B company). I fear that if the company backs away from the layoffs, the market will punish the stock. Unless, of course, traders understand this is merely a rumor about the thought of layoffs.
My two sense: YHOO is a great company, but a mature one. It’s about time Yahoo! cleaned up shop, especially at the very top… in the middle and at the bottom too. The company’s fat, slow, it’s time to go.
SAI has an updated post. I agree that Yahoo! could very well survive and thrive alone - online ads will double in 3 years and YHOO is the biggest site online - but it is a bit troubling that Jerry Yang and the Board are seemingly going to let the market decide the fate of the company after the results are reported. I sure hope that is a rumor and not what the company actually plans to do.
You don’t manage according to Wall Street, Jerry, you just don’t !
Note: Long YHOO stock.
PLAY
