There are people who want to finance AOL CEO Tim Armstrong to buy Yahoo, Needham & Co. Analyst Laura Martin told OMMA Publish Entertainment conference attendees in Santa Monica on Tuesday in response to an audience question.
Gaining leverage, however, is really difficult. Companies can't get more than five times their value. And traditionally tech companies have not been levered. Really, the strategic question becomes what happens when you put together two weak players.
Martin doesn't think AOL and Yahoo will come to an agreement. "Tim continues on his way with the team he's brought from Google, who are all living and dying by trying to save AOL," she says. "Yahoo stays with its own problem. And the board has a dilemma. They say they're behind her, but I'll tell you Wall Street has run out of patience with her. We're not the most patient people, but we're ready to see her gone."
The "her" Martin spoke of referrers to Yahoo CEO Carol Bartz, who joined the company in January 2009 from Autodesk, where she served as chairman, president and CEO to the design software company.
Questions about Bartz and Yahoo's future grew louder during the past week after unnamed sources in The Wall Street Journal reported the company could be broken up and sold piecemeal to AOL or private-equity firms.
Bartz told Martin during a discussion earlier in the day that as a CEO "you have to act like you have confidence in your decisions even when you don't."
Maybe, but Martin brought up a good point about tech companies in general. Some mature companies start to falter because the employees willing to take a risk to get the company off the ground are no longer there to take chances. These risk-takers who need the adrenaline rush that makes great products left for other startups to become chief technology officers or to begin something else.
Meanwhile, pressure mounts on Bartz to turnaround Yahoo. The average time visitors spend on Yahoo has dropped 35% since Bartz took the helm, from 336.4 minutes in January 2009 to 217 in September 2010, according to SFGate.comciting comScore stats.
That means advertisers have less time with those searching for information through Yahoo's portals. It's also not clear whether the Yahoo-Bing search alliance and integration had an influence on these numbers. "No," says Chris Nielsen, founder at Domain Incubation. "Yahoo had a whole lot of good things going on for them, but they just didn't know how to utilize the tools and integrate them into search."
Nielsen says the Yahoo directory worked well, but the Sunnyvale, killed it off when it started charging too much for the service.
What's your experience with Yahoo during the past two years?