Hug a Yahoo Today
Yahoo! earnings report came out yesterday. I have to say, this was quite disappointing. Yahoo! earned 10c/share in this quarter missing the expectations by 1c. It seemed like they pulled all stops to meet/beat analyst expectations. Yahoo! bought back $595M worth of stock priced under $30/share through the share repurchase program. This took ~19M shares off the market during q1. Given that the final earnings were 142 million, this buyback has contributed 1.3c/share in earnings bringing the real earnings down to 9.1c. They also committed 250M$ to another share buyback program concluding in august 2007. While buybacks are good to indicate long term confidence in the company, in this case, they do indicate that the real business is weaker than what the street thought by a wide margin (off by 2c/share).
The yahoo leadership was clearly more optimistic in the last quarter or 2 than they have been in the past 2-3 years. Every few days there is an article in news about how sue/terry thought panama was doing. It seemed like the ship has turned around and beginning to accelerate.
Unfortunately not. Now the word is that things have turned around but the acceleration is yet to come. We are being promised that the acceleration is going to come. However, the promise is not backed up with increasing guidance for 2007.
Even for a former employee it is becoming hard to have confidence in the growth story being told. I am a shareholder and i will continue to be a shareholder for the long haul, however, i feel sad for a lot of my yahoo colleagues. The growth story may indeed turn out right and yahoo! stock may re-attain its past glory in the coming few months. But days like this can be quite de-motivating for an employee. There are a lot of talented folks at y!. Keep your spirits up and keep doing the right things you have been doing. This is my virtual-blog-hug to all of you.
April 18th, 2007 at 3:30 pm
Nice post, though I think you should add a hug for Yahoo shareholders as well! It is very frustrating to watch the excellent work of many excellent Yahoo folks seem “not to matter” in the stock price battles. It’s tempting to blame the management but I don’t know enough about them to do that. However, Google’s ability to turn similar innovations into stock gains tends to support the idea that mid and upper management is … failing Yahoo.
April 26th, 2007 at 12:46 pm
I was never convinced that Panama would make a dent in Google’s dominance. Terry Semel isn’t helping any, either. The next good day for YHOO owners might be the day when Mr. Semel leaves (or, is let go).