Another day, another hare-brained scheme to buy Yahoo. This time, the player isn't Microsoft CEO Steve Ballmer, but former AOL CEO Jon Miller, who now runs a venture-capital fund. But the prospect of a deal seems as far off and fanciful as Microsoft, which spent most of the spring and summer trying to buy Yahoo, coming back to the negotiating table. Miller wants to buy Yahoo, but is having trouble coming up with the money, the Wall Street Journal reports. Is there no one serious who wants to buy this company?
Through the golden heart of every world-changing startup pulses an avaricious get-rich-quick scheme. Larry Page and Sergey Brin, the billionaire-boy cofounders of Google, established this doing-well-by-doing-good myth. But Mark Zuckerberg hasn't been able to make the same magic happen for his employees. In his efforts to make good by them, he may end up quashing a nascent market in Facebook shares.It's not for lack of trying. Silicon Valley's stock-options millionaire make money by getting the right to buy shares at a low price and selling them for a higher one. Facebook's soaring valuation — Microsoft invested $240 million for a tiny stake, in a deal which valued all of Facebook at $15 billion — threatened to undo that equation. How is Facebook supposed to soar past $15 billion in value? So Zuckerberg & Co. turned to issuing restricted stock units, or RSUs, instead. (Restricted stock units are common at large companies like Google and Microsoft, but unusual for a company Facebook's size and age.) The restricted-stock plan has created a new complication: Once it has more than 500 RSU holders, SEC regulations may require Facebook to start publishing its financials, even if it doesn't conduct an initial public offering. Facebook's revenues still aren't pretty enough for public exposure. Facebook's lawyers have sought, and obtained, an exemption. Part of the argument they made is that issuing RSUs won't create a market in Facebook shares. Facebook, unusually for most of Silicon Valley's private companies, has not had many restrictions on what employees and other shareholders could do with the shares they own. Most have rules that force shareholders to offer shares to the company first — a right of first refusal — or outright prohibitions on unauthorized sales. But the letter Facebook sent to the SEC says that even when the stock units convert to common shares, they have limits on their sale: "... the Plan has been structured to preclude any trading of RSUs or any interest therein from developing." Even if Facebook permits an employee convert their stock units to shares and sell them, the company can then prevent the buyer from selling. Employees at Facebook — especially the early ones, whose holdings are now substantial — have been agitating for some time to sell their shares, and there are still, even with the public markets taking a beating, interested buyers. Zuckerberg finally bowed to this pressure and set up a program, now underway, to let employees cash out up to $900,000 in shares. (Note the symbolism of the figure: No one will become a millionaire.) But that may be it. If Facebook extends its stock-sale restrictions to common shares, not just the restricted-stock units, both employees and the investors so eager to snap up their shares will be stuck, until Facebook sells out or goes public. Zuckerberg has made it clear he thinks both of those events are far off — and the 24-year-old CEO still owns 27 percent of the company and more or less controls the board. It's a dicey gamble. The prospect of selling Facebook shares privately must surely have attracted some employees who counted on a relatively quick cash-out. But shutting down the prospect of further stock sales will make sure the Facebookers who remain will be more committed to the company for the long haul. Zuckerberg doesn't have much choice. As long as Facebook employees can find buyers for their shares, they'll be tempted to leave rather than stay at a company going through a tumultous adolescence. Already, the company has had far more turnover, from bottom to top, than Google did. Not a single high-ranking exec left Google for the first six years of its existence. Facebook has lost three of its four cofounders, and numerous people underneath them, from former COO Owen Van Natta on down. No wonder Zuckerberg wants to slam the exit door closed.
What to expect when you're expecting a billionaire? A tipster reports seeing Google cofounder Sergey Brin running into a hospital, orange Crocs and all. Here's what that means: His wife, Anne Wojcicki, is nine months pregnant with the couple's first child — who will be born into a fortune still worth $10 billion or more, even with Google shares plummeting. The spot where Brin was sighted, El Camino Hospital, has one of the Bay Area's best childbirth practices, and is close to Google headquarters in Mountain View, Calif. When we last saw Wojcicki, she was on Oprah talking about 23andMe, her genetics-testing startup, with the TV host herself begging Wojcicki to give birth already. It's possible that Brin was just there to tour the hospital, a common practice before birth, but his haste suggested otherwise, our tipster claims:
After a CEO's ouster, the knives always end up in the wrong person's back. Take how Jerry Yang is being ritually badmouthed now that he's out of Yahoo's top job: Such a nice guy. We all loved him. But he couldn't make a decision to save his life. Now, Yahoo's board of directors is being lionized for giving the nice guy the boot, and heroically engaging in a search for his replacement. But aren't they guilty of the same sins?What rank hypocrisy! Where's the blame for tapping Yang for the job in the first place? For not pushing him out sooner? And for that matter, for not having a hot-swappable substitute in the executive ranks when Hollywood dude Terry Semel abruptly quit last year? Those are all grave transgressions to which Yahoo's directors ought to confess. Chairman Roy Bostock should be first out the door. An old-school adman ridiculed within Yahoo as an "empty suit," Bostock has added nothing to the company. And he shredded any remaining credibility by brazenly lying to Newsweek about Jerry Yang's status as CEO, saying he was firmly ensconced in the job even as the board discussed his ouster. Add to the list investors Ron Burkle, Gary Wilson, and Art Kern, whose ouster I called for earlier this year. Can anyone say what Yahoo has gotten from their collective 26 years on the board? Corporate raider Carl Icahn, too, should make his stay on Yahoo's board brief and symbolic, a prize won for waging a fierce battle with Yahoo management over its failure to sell the company to Microsoft. He may have been right about Microsoft, but I can't believe he has the company's long-term interests at heart. And Jerry Yang, who has been allowed to keep his board seat, should resign it. Yahoo needs a clean break from his mismanagement; a lingering presence will only hurt the company he professes to love. Whoever Yahoo picks as its next CEO should make a priority of mucking out the boardroom; candidates for the job should demand that these six directors offer their resignation before they sign on the bottom line. Otherwise, the job will be untenable. The rest of the board I'd recommend Yahoo's next CEO keep, at least for the time being. Frank Biondi and John Chapple are too new to pass judgment on; venture capitalist Eric Hippeau and Hewlett-Packard executive Vyomesh Joshi actually have knowledge of the marketplace that's valuable to Yahoo; and telecom exec Maggie Wilderotter is a credible candidate to step in as Yahoo's CEO, should the board choose one of its own.
Yahoo founder Jerry Yang is stepping down as CEO, and a search is underway for a replacement after a tumultuous 18 months on the job. Which is curious. In a recent interview, Yang had just told AllThingsD's Kara Swisher, "In this uncertain environment, I think I am absolutely the right person" to lead Yahoo. He must have changed his mind; Swisher reports that the decision was a "mutual" one made by Yang and Yahoo's board of directors. Either Yang was lying to Swisher, or he was deceived about the board's lack of support for him. Executive recruiter Heidrick & Struggles is conducting a search for Yang's replacement. Finding a successor to Yang will be difficult — not because Yang is irreplaceable, but because he has made such a mess of things that it will be hard to persuade a capable executive to risk their reputation fixing it.There are, nevertheless, some possibilities. One is former eBay CEO Meg Whitman, who has been toying with entering politics. eBay and Yahoo have long flirted with a merger, so she's reasonably familiar with the company, and with the challenges of running a large Internet company. A similar candidate: Jon Miller, the former CEO of AOL, who is now a partner at Velocity Interactive Group, a venture-capital firm. Money is tight in venture capital, and Velocity has yet to raise a promised new fund in the multiple hundreds of millions of dollars it had planned for when he joined it. Yet Miller has a problem: Time Warner, the parent of AOL, used his noncompete agreement to prevent him from joining Yahoo's board; it's not clear why they would waive it to let him become CEO. The agreement does not expire until next spring. News Corp. COO Peter Chernin does not seem to have much hope of succeeding Rupert Murdoch as CEO, who is expected to hand the media conglomerate over to one of his children instead. But he does not have a credible claim for having much online experience — overseeing MySpace is the best he can do there. And lastly, as a courtesy, Yahoo's president, Sue Decker, is under consideration. Some say Decker's Machiavellian maneuverings helped out former Hollywood studio boss Terry Semel as CEO last summer. But she's seen inside and outside the company as a bad manager who lacks a vision for what Yahoo should be. More:
Did the internet just cause Sarah Palin to destroy evidence? The potential Veep is in a bit of trouble for conducting state business using her personal, unarchived email address (email@example.com) instead of her official account (which is, of course, subject to laws requiring the retention of government records). Emails from that Yahoo account are already being sought in connection with the Troopergate investigation. Now comes word that Anonymous, the fun-loving Internet trouble-makers based loosely around the message board 4Chan, gained access to another Palin email account: firstname.lastname@example.org. It looks legit! The offending posts, screenshots, heretofore unseen family photos, and emails have all been deleted from Imageshack and 4Chan. But we have them. You want to read Sarah Palin's email? Ok, sad thing first: a good Samaritan reset the password and tried to alert Sarah. But he also posted the new password, causing multiple people to try to log in at once, freezing the account for 24 hours. And now, the account has been deleted! Which is, as we said, maybe destruction of evidence? So for now this is, we think, all we'll get to see from this email account (if anyone finds evidence of saved emails, let us know.) The full timeline of events, with corroborating evidence of the legitimacy of these screengrabs, is here. Here's why it all looks convincing: