They're similar because there's lots going right with the business.
Where Yahoo! has always had traffic and an ubiquitous presence, Microsoft still dominates consumer and enterprise spaces with a massive Windows/Office installed base. Albeit for different reasons, Yahoo! has been able to rely on a strong cash position and pretty solid balance sheet. Microsoft is even stronger in that regard.
But Yahoo!'s board and CEO search committee realized it had to kick the heroin habit. It could no longer uncritically consider all of the above as things it had going for it; rather, it had to go to another extreme, treating these positives as having overstayed their welcome. If the company didn't move aggressively to change its culture and shift strategy, it would, at some point, devolve into irrelevancy.
That's, for all intents and purposes, where Microsoft finds itself.And, if you consider the candidates up for the gig and observe the concern that one got away, you have to believe it's set to hire an enabler CEO. Somebody who will facilitate the status quo with empty talk of change, managing business as usual and overseeing the downfall. If you don't think this qualifies as a "loser" strategy to hire a "loser" CEO (in the most loving and street slang sense of the term), you're wearing the same brand of blinders Blackberry (BBRY) faithful had on before that company's all-out collapse. Cash. Installed bases. Reputation. Traffic. Tech that you consider impossible for enterprise (and some consumers) to unwind. These are not signs of a healthy business when they're pretty much all you have to hang your hat on. (I say "pretty much" because Xbox is an incredible franchise, that, sadly, Microsoft fails to take full advantage of). That last one -- Tech that you consider impossible for enterprise (and some consumers) to unwind. Though I don't know her, I presume that's something that would make Marissa Mayer physically sick. The notion that you somehow weaseled your way into the life of your users and, like a mooching boyfriend, you can make it hard for these users to extricate themselves from a less-than-ideal situation. That was basically what Blackberry hung on to ("security" was their security blanket) as it refused to hire a flame throwing CEO and incite meaningful change. Now Microsoft appears set to do the same. And some readers take exception to the focus on the CEO search as pivotal, of paramount importance and, as it stands, the stuff losers are made off. But, remember, what you read in the comments section of a financial media article does not represent consensus. Others do exist who get what I'm saying loud and clear:
Yes. RT: @Rocco_TheStreet Commenters are telling me that the direction MSFT takes w/ CEO is irrelevant to the stock. Are they insane? Jim (@JimboRey) December 13, 2013
Microsoft's Pointless Search for a Loser CEO -great!- @Rocco_TheStreet takes after @jimcramer no doubt http://t.co/psNcziLE2E #MSFT #failure Steiner on Failure (@stnr_on_failure) December 14, 2013
I'm not holding my breath that Microsoft will. Follow @rocco_thestreet --Written by Rocco Pendola on an airplane somewhere over the Northeast over the weekend leaving winter weather behind en route to LA!
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV