The following is an excerpt from Miguel Helft | November 19, 2015 | Forbes.com |
The late October offsite meeting for more than 120 of Yahoo YHOO +0.00%’s top executives at the Park Central Hotel in San Francisco started well enough. The first day jumped from strategy sessions to upcoming product discussions. But on day two, when the topic shifted to employee engagement, and with CEO Marissa Mayer in and out of the room, things went downhill fast. When Bryan Powers, Yahoo’s head of h.r., glossed over results from a recent employee survey that showed dramatic double-digit drops in metrics like morale and trust in the company’s executive leadership, various vice presidents began venting to one another. Those murmurs of discontent erupted into outright heckling when another session—billed as an opportunity to improve communication—turned into a lecture from Yahoo’s top brass that many found patronizing. Vice presidents started calling out their superiors for “not listening,” “not understanding” and “not being interested in changing.” Some cursed.
“It was the most stressful and acrimonious professional meeting I’ve ever attended,” says one participant.
Such is the state of affairs at Yahoo these days. More than three years after Mayer was brought in to turn things around, the original Internet media giant is still failing at its core business and getting whipped not only by Google GOOGL -0.13% and Facebook FB -0.94% but also by newer entrants such as Instagram, Snapchat and even the beleaguered Twitter TWTR +3.85%. In the most recent quarter its net revenue declined 8% and search revenue, a priority of Mayer’s, declined 13%. Overall traffic has continued to inch downward, and none of its new mobile apps has yielded new users or revenue on the scale Yahoo needs to offset the declines. The stock market has rendered its assessment: Yahoo, which has a market value of $31 billion, owns a $30 billion stake in Alibaba, an $8 billion stake in Yahoo Japan and has $5.5 billion in cash net of debt. While investors’ often apply discounts to the company’s Asian assets to account for possible taxes and other risks related to their eventual spin off, in many models Yahoo’s core business – with $4 billion in revenue and 10,700 employees – has an implied valuation of less than zero.
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