Yup, those Yahoo Panama expectations were too high

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Narrative at work.

Whatever the actual situation at Yahoo, the obvious narrative is that it's flabby and trailing Google, which does all things well. And Mr. Semel is - reputedly - so much on his way out that he's left the questions requiring fatuous answers.

The way narrative can color understanding is shown in considering the points made about increasing value in Asia.

Here's Point 4 above:

I wonder if Yahoo is getting some pressure from large shareholders. Decker made a point to talk about Yahoo's balance sheet levers including stakes in Yahoo Japan and Alibaba. Why is this a big deal? Everyone knows Yahoo's balance sheet is fine and cash isn't an issue?unless a big shareholder wants better returns. I have to noodle that point over, but it bugs me. Another alternative: Is Yahoo pondering selling some Yahoo Japan so it can make a big acquisition. It may not be a good idea to skip international growth to buy something like Facebook.

From the linked response to the call:

Here's something disturbing: Decker is talking about Yahoo's "substantial balance sheet resources" beyond its cash - almost $8 billion from its stakes in China's Alibaba, Yahoo Japan, and Gmarket in Korea. But Yahoo can't sell those without essentially exiting some of the biggest markets in Asia. Is she seriously suggesting that Yahoo would do that to raise cash? And if so, why? What is she worried about?


Another guess: if Yahoo is sold, the asking price would be surprising. Contingency planning for an offer would lead to a review of assets.

Or maybe it's a way to prevent going past an important point this way:

"Everyone knows Yahoo's balance sheet is fine and cash isn't an issue ..."

... and inserting a positive note about the company.


There is a subtext here. Maybe the issue for Yahoo isn't actual problems, but how to prevent a damaging narrative from turning into conventional wisdom.

Posted by: Anton Philidor   Posted on: 04/17/07 You are currently: a Guest | Members login | Terms of Use

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