Now that the speculation surrounding the new
CEO is finally over, with
getting the nod over Sue Decker, it's time to start the hard work of turning around the company.
With that in mind, here are some suggestions for an action plan for Bartz, the former chief at
, as she starts her first 100 days at Yahoo!:
- Push out the December-quarter earnings date until later in February. Jerry Yang set the tone for his tenure with a poor performance on his first earnings call as CEO -- with the promise for a more concrete action plan that never materialized on the subsequent earnings call.
Given the lackluster reception that the share price has had to the news of Bartz's appointment, it's critical to present an action plan on the first earnings call. She should give herself as much time as possible to prepare for the call. Currently the December-quarter earnings results are tentatively scheduled for Tuesday, Jan. 27.
Take the deep writedowns in the December quarter. Impair the goodwill. Clean the slate. Take all the charges that are reasonable and allowable. Set the stage for 2009. Analysts are forecasting consensus earnings of 13 cents a share for the December quarter (high of 18 cents and low of 7 cents).
Investors should realize that there is a very good chance Yahoo! generates a loss in the quarter -- even on a cash basis.
Walk away from a transaction with AOL. Clean up Yahoo! without the distractions of trying to integrate with
Time Warner's (TWX) AOL. It's unlikely the property is going to get sold to anyone else. Perhaps the transaction can be accomplished with a lower purchase price in 2010. Display advertising is a disaster.
Make it clear that you plan to revive the company -- not dress it up for sale. There are no buyers in the current market for all of Yahoo! anyway.
Use punctuation in internal memos. This one is symbolic. Yahoo! needs a morale boost. Yang was frequently criticized for internal memos that lacked proper punctuation, ultimately becoming a symbol of a leader who had no exclamation point.
Be clear on search. Needed or not? End the embarrassing back and forth in the press between Yahoo! and
Microsoft (MSFT) - Get Report. Take a stance, make your statement, bring it to an end.
Resign your board seats. Yahoo! needs all your energy now.
- Guide low. Issue conservative 2009 and March-quarter guidance. It would be nice to see Yahoo! produce results at the upper end of a forecast for a change of pace. Under promise, over achieve. Analyst estimates still need to come down across the board for 2009 and the March quarter.
Don't focus on the share price. It's likely going to take some time before Yahoo! shares see the high teens again. Markets do reward results.
Revisit Wenda. Many consider Wenda Harris Millard the best salesperson in the business -- ever. Now that Decker has resigned, perhaps it makes sense to bring back the person who sold Yahoo! inventory to the big brands.
Reach out to investors more frequently. Wall Street tends to like to have a message repeated over and over again. Get out and market once there is a message to send. Thank your current IR team for the tremendous work they have done over the last years communicating effectively to investors.
Buy Twitter. If you are going to keep search, it needs to have an edge. Twitter could give Yahoo! a real-time component to search results that no other engine has.
Improve revenue per head. Be clear about the fact that additional headcount reductions may be a fact of life.
At time of publication, Gillis was long Yahoo!, although holdings can change at any time. Colin Gillis is the director of research for
, focused on driving the premium product offerings. His focus remains media business models that lever the Internet. This includes publisher models, SEM strategies, networks and exchanges, video strategies, virtual worlds, performance-driven customer acquisition and converting advertising models into data-driven models.
Prior to joining
, Gillis was a senior Internet analyst at Canaccord Adams, a global investment bank. He has been academically published on the topic of computer parallel processing.
Under no circumstances does the information in this column represent a recommendation to buy or sell stocks.