welcome to the sixth installment of hit
Bolger I’m your host Afghan Carver
solution and I’m CT Moore welcome back
to you thanks for having me a lot to
talk about today lots to talk about soap
operas going on at AOL and Yahoo of
course we’re going to talk about whether
or not the laws of diminishing return
applied to advertising when it comes to
scale and reach then later on in
lightning round we’re going to cover a
lot of things such as CBS vintage
business also on AOL as well as
delicious delicious is coming back
thanks to the guys who started YouTube
let’s get right to it okay so a lot of
rumors going around a lot of action
around Yahoo’s name right now they fired
Carol Bartz apparently they’re not
looking for a replacement there’s rumors
of mergers what do you make out of this
what do you think what options does a
company like you have left at this point
well yeah was a lot of options I think
they are the premier digital media
company out there I think most users who
you know visit sites don’t really care
about what bloggers have to say and most
advertisers also don’t really care about
what the bloggers think yeah who should
do the reality is that Yahoo remains the
largest pure-play digital media company
and I think they have a lot of momentum
in the last year with what Ross Levinson
has started to do basically moving them
away from being a tech company and more
of a publisher so I think if they
continue that path they might even do
better with Carol Bartz gone because
Carol Bartz was like an operations
person who came in to sort of you know
clean up the the excessive layers of
management and whatnot she wasn’t a
product person she wasn’t a sales person
necessarily I think she had to go the
way she was fired might raise some
questions getting fired by the Chairman
over the phones definitely not cool but
she had to go and I think it was just a
matter of time
fair enough I want to point out though
that I think ours a lot of options so
Yahoo could basically stay independent I
don’t necessarily think this talk about
merging with AOL really holds any water
I mean that’s like the expression of
time to bridge together what do you
think’s gonna happen
it ain’t gonna float realistically Yahoo
could sell right now to a big media
companies such as Viacom or CBS or News
Corp or Disney or Comcast I don’t
necessarily see that happening they
could also sell to a tech company
Microsoft could come back you know we
all remember Microsoft for forty five
billion dollars for Yahoo a few years
ago I wish I’m sure are you still in the
stock at the time no longer now I’m sure
they wish they could go back and
basically buy
sorry sell to Microsoft I don’t
necessarily see that happening
I think if they were to stay in the
pendant and unload all of the Asian
assets which really they have no say in
in terms of day to day they would
basically wind up with ten billion
dollars worth of cash on their balance
sheet because the Asian assets basically
account for a hundred percent of the
company’s market gap right now don’t you
think it might be worth it to hold on to
assets in a growing market yeah but only
if you actually have a say on it we
remember that Jack Ma basically spun off
Ali pay from Alibaba and sold it to
himself and essentially allegedly
screwed Yahoo out of that shareholder
position that they had so when forget
not having any operational say on the
matter if you don’t even if you’re not
even aware that that you’re holding has
been evaporated liquidated it just goes
to show that it’s become a distraction I
think Yahoo’s Asian assets maybe had a
lot of strategic value early on because
the market assumed that they would be
able to you know get some synergies out
of it it’s not really the case they’re
sort of run independently and to I think
it’s become a distraction yahoo has
revenues last year of seven billion
dollars and they have a bid of 1.2
billion dollars traditional media
companies like CBS and Viacom trade for
about 15 times evide so if you take 15
the multiple of 15 times
Abaddon and x Yahoo’s 1.2 billion dollar
income that basically means that Yahoo
should have a 15 to 20 billion dollar
market cap Yahoo right now trades for 15
to 20 billion dollars but that is really
just reflecting the value of its asian
assets
so if Yahoo right now has only 2 billion
of cash but they sell you know the 10
billion to 15 billion dollars worth of
Asian securities that they have all of a
sudden their enterprise value which is
market cap plus cash jumps up sorry it
which is a market value less cash it
just jumps up their market cap would
basically double overnight through just
sheer financial engineering so I think
they will have to unload the asian
assets if they actually want to even buy
anything it was reported that they
wanted to buy hulu they’re still in the
running although it looks it looks like
Amazon and Google are the leaders there
and I think one reason why Amazon is the
leader is because of the connection that
Jeff Bezos CEO of Amazon has with Jason
Kilar but the reason why Google might
end up winning the Derby is because they
have more cash than anyone else they can
offer a lot more not just in terms of at
sale price but they can offer a lot more
overtime in terms of licensing fees
which is I think what Hulu’s owners
Disney Disney Fox and Comcast NBC
Universal care more about if hulu sells
for two billion three billion whatever
that cash right now doesn’t really move
the needle for traditional media
companies that own the hulu stock but if
each year google commits to paying those
traditional media companies say five
hundred million dollars as an annuity
that will have a lot of value over time
so my guess is that yahoo will find
itself on the outside looking in will
not be able to buy hulu that will upset
them enough to realize that they just
need to raise cash and the best easy way
for them to do that is by unloading the
asian assets if they’re gonna focus on
publishing and they want to make cash do
you think it would make sense for them
to unload their their web applications
yahoo search is already powered by Bing
they have Yahoo Mail which you know
really isn’t driving their business in
any meaningful way anymore and then they
have other services like Flickr which
they own while it is the content it’s
user-generated and it’s not that premium
style of content that they seem to be
pushing you seem to suggest they push
into I do think that they need to move
away from being a tech company because
they’re gonna not be able to compete
with Google as in terms of selling off
some of those assets it’s a great segue
we’ll revisit this during the lightening
round when we talked about the you
YouTube guys bringing back delicious and
we’ll talk a bit about what Yahoo could
do with regards to Flickr we’ll be right
back
Bolger I’m your host Afghan Carver
solution and I’m CT Moore welcome back
to you thanks for having me a lot to
talk about today lots to talk about soap
operas going on at AOL and Yahoo of
course we’re going to talk about whether
or not the laws of diminishing return
applied to advertising when it comes to
scale and reach then later on in
lightning round we’re going to cover a
lot of things such as CBS vintage
business also on AOL as well as
delicious delicious is coming back
thanks to the guys who started YouTube
let’s get right to it okay so a lot of
rumors going around a lot of action
around Yahoo’s name right now they fired
Carol Bartz apparently they’re not
looking for a replacement there’s rumors
of mergers what do you make out of this
what do you think what options does a
company like you have left at this point
well yeah was a lot of options I think
they are the premier digital media
company out there I think most users who
you know visit sites don’t really care
about what bloggers have to say and most
advertisers also don’t really care about
what the bloggers think yeah who should
do the reality is that Yahoo remains the
largest pure-play digital media company
and I think they have a lot of momentum
in the last year with what Ross Levinson
has started to do basically moving them
away from being a tech company and more
of a publisher so I think if they
continue that path they might even do
better with Carol Bartz gone because
Carol Bartz was like an operations
person who came in to sort of you know
clean up the the excessive layers of
management and whatnot she wasn’t a
product person she wasn’t a sales person
necessarily I think she had to go the
way she was fired might raise some
questions getting fired by the Chairman
over the phones definitely not cool but
she had to go and I think it was just a
matter of time
fair enough I want to point out though
that I think ours a lot of options so
Yahoo could basically stay independent I
don’t necessarily think this talk about
merging with AOL really holds any water
I mean that’s like the expression of
time to bridge together what do you
think’s gonna happen
it ain’t gonna float realistically Yahoo
could sell right now to a big media
companies such as Viacom or CBS or News
Corp or Disney or Comcast I don’t
necessarily see that happening they
could also sell to a tech company
Microsoft could come back you know we
all remember Microsoft for forty five
billion dollars for Yahoo a few years
ago I wish I’m sure are you still in the
stock at the time no longer now I’m sure
they wish they could go back and
basically buy
sorry sell to Microsoft I don’t
necessarily see that happening
I think if they were to stay in the
pendant and unload all of the Asian
assets which really they have no say in
in terms of day to day they would
basically wind up with ten billion
dollars worth of cash on their balance
sheet because the Asian assets basically
account for a hundred percent of the
company’s market gap right now don’t you
think it might be worth it to hold on to
assets in a growing market yeah but only
if you actually have a say on it we
remember that Jack Ma basically spun off
Ali pay from Alibaba and sold it to
himself and essentially allegedly
screwed Yahoo out of that shareholder
position that they had so when forget
not having any operational say on the
matter if you don’t even if you’re not
even aware that that you’re holding has
been evaporated liquidated it just goes
to show that it’s become a distraction I
think Yahoo’s Asian assets maybe had a
lot of strategic value early on because
the market assumed that they would be
able to you know get some synergies out
of it it’s not really the case they’re
sort of run independently and to I think
it’s become a distraction yahoo has
revenues last year of seven billion
dollars and they have a bid of 1.2
billion dollars traditional media
companies like CBS and Viacom trade for
about 15 times evide so if you take 15
the multiple of 15 times
Abaddon and x Yahoo’s 1.2 billion dollar
income that basically means that Yahoo
should have a 15 to 20 billion dollar
market cap Yahoo right now trades for 15
to 20 billion dollars but that is really
just reflecting the value of its asian
assets
so if Yahoo right now has only 2 billion
of cash but they sell you know the 10
billion to 15 billion dollars worth of
Asian securities that they have all of a
sudden their enterprise value which is
market cap plus cash jumps up sorry it
which is a market value less cash it
just jumps up their market cap would
basically double overnight through just
sheer financial engineering so I think
they will have to unload the asian
assets if they actually want to even buy
anything it was reported that they
wanted to buy hulu they’re still in the
running although it looks it looks like
Amazon and Google are the leaders there
and I think one reason why Amazon is the
leader is because of the connection that
Jeff Bezos CEO of Amazon has with Jason
Kilar but the reason why Google might
end up winning the Derby is because they
have more cash than anyone else they can
offer a lot more not just in terms of at
sale price but they can offer a lot more
overtime in terms of licensing fees
which is I think what Hulu’s owners
Disney Disney Fox and Comcast NBC
Universal care more about if hulu sells
for two billion three billion whatever
that cash right now doesn’t really move
the needle for traditional media
companies that own the hulu stock but if
each year google commits to paying those
traditional media companies say five
hundred million dollars as an annuity
that will have a lot of value over time
so my guess is that yahoo will find
itself on the outside looking in will
not be able to buy hulu that will upset
them enough to realize that they just
need to raise cash and the best easy way
for them to do that is by unloading the
asian assets if they’re gonna focus on
publishing and they want to make cash do
you think it would make sense for them
to unload their their web applications
yahoo search is already powered by Bing
they have Yahoo Mail which you know
really isn’t driving their business in
any meaningful way anymore and then they
have other services like Flickr which
they own while it is the content it’s
user-generated and it’s not that premium
style of content that they seem to be
pushing you seem to suggest they push
into I do think that they need to move
away from being a tech company because
they’re gonna not be able to compete
with Google as in terms of selling off
some of those assets it’s a great segue
we’ll revisit this during the lightening
round when we talked about the you
YouTube guys bringing back delicious and
we’ll talk a bit about what Yahoo could
do with regards to Flickr we’ll be right
back
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