Comments on: What if Jerry Yang is actually right?

Critics and shareholders of Yahoo's Jerry Yang are saying he has acted irrationally. But are those critics and shareholders so rational themselves?

[patrick_i]

I second that emotion. The problem with many American investors is their outlook is so short term. Short term is a few days, long term is a few months.... Just like realtors, brokers like to "hype" a specific investment (or location) beyond what it's really worth so they can make a gain in the short term. In the end everyone loses. I think (hope) that sometime soon the way brokers and investment firms and realtors do their business will be changed and more strictly regulated. They are mostly responsible for the mess we are in now I think.

[ChrisMatyszczyk]

Hah, thank you, Patrick,

The drive to deliver a set of numbers every quarter- and, as you say, the hype that is involved at every turn from those who seek to profit most in that very short term- means that real success is a very slippery customer.

I don't know if everyone loses, though. Those brokers and other Streety people simply don't seem to care about anything other than how they can squeeze the next few weeks. Can anyone make them?

thank you for commenting,

Chris

[smncameron66]

This is a blog post filled with inaccuracies which ultimately snowballs into a piece which makes so little sense I wonder if you reread it even once before posting.

"Shareholders like to think they are owners. A rational concept.
In fact, they are gamblers. The invitation to buy a share is an invitation to gamble on every single decision taken by a company's board."

First of all shareholders ARE owners. The fact that they are taking a risk doesn't erase the ownership stake they hold. As such they do have a right to be consulted.

Even if one was to accept that shareholders are gamblers, the game they are betting on supposedly has rules. Imagine that you bet on a football game but everyone sat down and started to play cards instead. You'd have every right to be upset. During Yahoo's IPO, if Jerry Yang had said that he would be making decisions based on his whims do you think he would have gotten as much money? Even if he doesn't have an obligation to try and make money, he should be honest about what his true intentions are.

You talk about the fact that other companies do the same thing, and I'm sure that they do. Very rarely however, do they cost investors close to the amount of money Jerry Yang has. That others get away with smaller indescretions doesn't mean that Yang is right. Sometimes size does matter.

But ultimately your article boils down to "rationality should not be expected." This is, quite frankly, the stupidest thing I've ever heard. Yes, sometimes the outcome of a venture differs from the consensus's expectations. Does this mean that anyone in a position of authority can do anything he likes? I am literally finding it hard to finds words to express the mixture of shock and awe I feel at the inanity of that statement. Should we give up trying to predict the future altogether?

Ultimatley Jerry Yang sold shareholders on the fact that he would be operating rationally, and in their best interest. Even if you think that a CEO who doesn't care about the share-holders and makes his decisions with a magic-8 ball is the way to go, why shouldn't Jerry Yang be prosecuted for fraud?

[ChrisMatyszczyk]

Hmm, I am touched that you have such strong feelings about the post.
But I wonder how touched it is to suggest that Mr. Yang should be prosecuted for fraud.
It is, I suppose for some, comforting to believe that there is a "consensus" that somehow rationally sets expectations. (Are we all members? Or is there a fee?)
But I wonder how true that is. Business is an extraordinary jungle, where rationalities are sometimes not quite what they seem. I am sure that you, too, have had that experience.
It is one thing to quit trying to predict the future. It is altogether another believing that you can somehow control it.
In so far as I can control it, I will work harder in the future to impress you. And, naturally, the consensus.
Thank you for commenting.

Chris

[jCounsel]

While many shareholders are gambling re: the outcome of the price of the shares (especially if they bought after the MS offer), if you own all the shares, you own the company. In effect, Yahoo is like Common Area in a subdivision--it is owned by the shareholders depending on how the filings at the County dictate (maybe equal shares for all owners, may be more ownership for bigger lots, ...).

A sale may be in the best interest in the short-term. However, it may not be the best result for the share-holders in the long-term. Sale or "no-sale" are simply options with economic costs. The shareholders need to determine whether they are looking for some (or potential) short-term gains or whether they think Yahoo is worth more in the long-term.

Me? I like the long-term aspects. Just as Apple seemed "down," I think Yahoo, and their employees, are capable of much better services and marketing (which has been less than stellar imho) than many other firms.

Whether Yahoo meets or exceeds my expectations or fails to do so is up to Yahoo, their Board, and Mr. Yang. That is, of course, unless my expectations change...

[ChrisMatyszczyk]

You are wise, jCounsel.
And you are extremely wise about Yahoo's marketing.
thank you for your very human perspective.


Chris