January 30, 2008

Let’s Trash Yahoo During Happy Hour

Michael Arrington

85 comments »

Yesterday I was scheduled to appear live on the Happy Hour show on the Fox Business Channel. The show is held at the Bull and Bear bar at the Waldorf Astoria hotel in New York, with customers milling around and drinking. I can’t believe no one has rushed the set as a prank yet.

The topic, I thought, was our presidential endorsements of Barack Obama and John McCain.

But we never actually talked about that. Instead, host Cody Willard dove into a general discussion of Yahoo v. Google and what might happen in an upcoming recession. A topic that I think about often and that is very timely given the layoffs at Yahoo, but I have to say I was caught completely off guard. But we were live on tv and so I just sort of kept talking.

Near the end I hinted at a strong rumor that has been floating around Silicon Valley: that Yahoo may someday have to face a very tough decision - to eiher kill its advertising network and partner with Google to boost revenues, or lose the entire company to a merger with Microsoft or a painful sale to a hedge fund.

Yahoo is in a precarious position right now, and things might get worse before they get better. Microsoft could buy them with cash they have in the bank (although a stock deal would be more sensible). The next six months will likely determine if Yahoo is a long term independent brand.

Sphere It

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January 30th, 2008 at 4:05 pm

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January 31st, 2008 at 8:23 pm

Jan’s Tech Blog » Microsoft收購Yahoo!

February 1st, 2008 at 9:05 am

» Yes, we were right Yahoo was seriously undervalued; Microsoft offers $44.6B for the company, a 62% premium over their value from yesterday Web 2.0 Money: The Money & Business Behind the Web 2.0 Innovations

February 1st, 2008 at 9:28 am

tech-talk.biz » Blog Archive » Microsoft bids $44.6bn to acquire Yahoo

February 1st, 2008 at 10:08 am

Microsoft Offers $44.6 billion for Yahoo | Bigg Magazine

February 3rd, 2008 at 12:18 pm

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Startup News

January 30th, 2008 at 5:33 am

Or Yahoo could Change its Biz Model
Caprese

January 30th, 2008 at 5:40 am

Oh god save us all from an M$Yahoo portal!!!
Jack

January 30th, 2008 at 5:58 am

Is Yahoo headed for the Deadpool?
Yasser

January 30th, 2008 at 6:03 am

Maybe they should just cut back on a couple of their services that are not as successful.
Ray Burt

January 30th, 2008 at 6:07 am

So….these guys use the ol’ Arrington interview trick….gotta respect them!
John Furreir

January 30th, 2008 at 6:21 am

Nice Job Mike. Excellent on Fox.

Congrats. Keep it rolling
auston

January 30th, 2008 at 6:22 am

Clicks denote a prospects interest, tv ads do not. That is why online advertising will not suffer greatly.
Devo

January 30th, 2008 at 6:22 am

What’s the first thing one is taught about being on camera? Keep the hands flying around to a minimum. To your credit, Mike, you’re well coached. Someone forgot to coach the German bar hostess interviewing you. Good lord.
Hany

January 30th, 2008 at 6:25 am

How much will Microsoft need to spend to buy Yahoo? How much is Yahoo worth and how much will it be sold to Microsoft?
ATS

January 30th, 2008 at 6:35 am

That would be YOUR endorsement sir.
Darren

January 30th, 2008 at 6:36 am

I find it funny that a company that makes money and turns over huge amounts can be marked as in trouble.

I actually think google could end up in trouble, lets face it the search results from google are slowly getting worse and people will end up going to yahoo for search if they could pull off a decent search platform. I think people in the tech new biz forget that they are not yahoos core audience and their audience must be pretty happy as they are not losing traffic to google for anything other than search.
Anony

January 30th, 2008 at 6:55 am

yahoo will bounce back and will do great under the new ceo. wait and watch
Lou

January 30th, 2008 at 6:56 am

I agree Darren. I find this yahoo vs google conversation comical. All it takes for Google to crash and burn is an alternative to the Pay-Per-Click model.
Lee Bandoni

January 30th, 2008 at 6:56 am

I made a post about this last week and think a few small changes could really turn Yahoo around.

http://www.leebandoni.com/2008.....hoo-broke/
Chris

January 30th, 2008 at 6:58 am

The downfall of Yahoo! Inc would be great for web 2.0. It would leave such a vacuum that it could fuel a boom in itself.

The more big consolidated players fall, the better for the next gen.
http://www.jhatak.com

January 30th, 2008 at 7:00 am

Yahoo……………………….. no more.

http://www.jhatak.com
Free Web Meetings
Dheeraj Sultanian

January 30th, 2008 at 7:00 am

I personally stopped advertising on Google last year because ROI sucks - I still advertise on yahoo. I might be one in a million, but the fact remains that online advertising will suffer in a US downturn for these reasons:

1. Dependance on large groups of advertisers - the pull back in spending by mortgage bankers and lenders and real estate companies may have taken 10-20% off google’s top line - watch for it during their earnings call
2. Bid-based ad networks - all it takes is for a few advertisers to leave to cause prices to tumble (ala eBay)
3. Browsers versus shoppers - in a recession, people will still use the internet to browse or look at things they wish they could buy - this reduces ROI significantly for keyword buyers, and to a point where advertisers simply shut off campaigns or pull back bids.

Remember - ease of creating a campaign also means ease of terminating that same campaign. TV and Radio buyers are locked into longer term contracts…

Companies with high organic traffic like eBay, Amazon and the like should fare better simply because they can suspend advertising and still bring in customers at higher ROI than anyone else, and their multiples are relatively low at this point.
Famous Quotes

January 30th, 2008 at 7:05 am

Yahoo will need to re-invent itself if they intend to remain an independent player. At the moment, they seem to be unable to do that.
Dan Schawbel

January 30th, 2008 at 7:13 am

It was bound to happen at some point.
WebSide Ventures

January 30th, 2008 at 7:14 am

Wow, that chick was hard to listen to. I think the only thing she knows how to say is “bricks and mortar.”
CanCar

January 30th, 2008 at 7:25 am

Yahoo will need to modernize its appearance, to make it more attractive and less complicated
Andy

January 30th, 2008 at 7:34 am

Bill Gates never mentioned a merger with Yahoo in his London talk earlier today ;0)
Greg

January 30th, 2008 at 7:37 am

I thought you were fine, Arrington, but holy god that show looks terrible.
John

January 30th, 2008 at 7:39 am

I’m sure that Yahoo will come back stronger than ever.
Paul

January 30th, 2008 at 7:42 am

I think Yahoo will implement the changes to make them a key player for the future.
lawrence

January 30th, 2008 at 7:45 am

lol - both those hosts are couple of yahoos
bob

January 30th, 2008 at 7:45 am

Those two hosts are awful, especially the girl. Ill continue to stick with cnbc
Rob

January 30th, 2008 at 7:46 am

Probably with a change at the helm there will be new ideas to get things moving in the right direction.
MediaGuru

January 30th, 2008 at 7:48 am

you mean that channel is still broadcasting? I guess Murdoch’s pockets are quite deep….
Jon Foreman

January 30th, 2008 at 7:58 am

Declaring Yahoo to be in a “precarious” state is an over emphasizing their problems. They aren’t losing money and are still profitable. Countrywide was a company in a precarious position - not Yahoo. Let’s not forget the huge amount of traffic Yahoo gets on a daily basis. Stagnant might be a better word to describe Yahoo’s ills.
Joe

January 30th, 2008 at 8:00 am

Man those free employee lunches are really killing Google.
Your Daddy

January 30th, 2008 at 8:02 am

Man that chick has nice legs! I’m sure you had a “hard” time not looking at them. LOL. Yahoo.Live would rock!
.rb

January 30th, 2008 at 8:02 am

(2) points.

1. Micheal by being on T.V. more and more, you are becoming a ‘authority’ for real life investing and internet news, this doubles your value. Good job!

2. That chick was annoying, and the fellow was a kiss ass.
Doug

January 30th, 2008 at 8:13 am

With 500 mllion unique and 4 billion page views per day, it’s almost comical that a company can screw things up. Mr. Semel was a real piece of work. Already, I’m hearing people bash Yang. But I’m willing to see what’s up his sleeve before I jump on the bandwagon.
dave

January 30th, 2008 at 8:23 am

Mike - you rocked in that interview - excellent job.
Bob Ngu

January 30th, 2008 at 8:27 am

Yahoo needs to trim a lot of its fat, come up with a cohesive strategy, and then execute. It got way bloated over the years building / acquiring too many unrelated services without a cohesive direction. If Jerry can come up with that strategy, Yahoo can reinvent itself.
Katherine

January 30th, 2008 at 8:27 am

Yahoo! cutting 1000 jobs won’t make a dent. Mediocrity and disorganization is not only a US problem but a global program with Yahoo! It looks like China and Japan are the only profitable countries, and rightfully so because Yahoo! doesn’t control business decisions from operation and advertising. Yahoo’s problems didn’t start in 2007; they started in 2003. Take a look at the management team globally - you can’t blame the people below if those leading can’t give clear direction or vision. What a mess!
Mike

January 30th, 2008 at 8:41 am

“I can’t believe no one has rushed the set as a prank yet.”

Wondered that myself.

You actually looked more adult on TV than you appear as an author.

You stole the show from those two chicks! Well done!
Everett

January 30th, 2008 at 8:51 am

@34 I’m with you on that one. Why do women who report financial news always sound so whiny???
Jared

January 30th, 2008 at 8:55 am

Great job Mike. You seem to be getting much more comfortable being on TV. Very smooth discussion on both ends however, that woman was getting VERY annoying….
Varon

January 30th, 2008 at 9:08 am

Honestly, I would hate to see Yahoo become Yahoo Live! We have been discussing Yahoo at namepros.com ( a domainer forum). Donny Simonton, CTO of parked.com has a credible 5 page turnaround plan for Yahoo. We hope that his 5 page recommendation on how Yahoo can once again get back on track, is read by the top guns at Yahoo. Hopefully, a post here can get their attention to read his suggestions.

Here is a reference to Donny Simonton’s post at namepros.com.

http://www.namepros.com/2503667-post3488.html

Yahoo…. are you listening?
BenHuc

January 30th, 2008 at 9:32 am

Moreover, Yahoo is cheap!!

Demonstration:
Yahoo’s audience was around 468M worldwide users in Jan 07.
Yahoo bourse capitalisation is about $25Md.
That means a user will cost $53 to Microsoft ($25Md/468M=$53).
An average Cost per click on Google is $0,54.
Hence, Microsoft will just need 100 clicks per user on a sponsored link to retabilize is acquisition (100*0,54=$54).

So, if Microsoft has the financial capabilities to purchase Yahoo, it has to do so and very fast (before Google does!)
ryan troy

January 30th, 2008 at 9:41 am

So obvious the powers that be at News Corp don’t like your endorsement, not in line with their “talking point of the day” and thus railroaded you with another topic.

Fox is weak.
Jeremiah Owyang

January 30th, 2008 at 9:44 am

Nice job Mike, good presence, and good insight.
JeffC

January 30th, 2008 at 9:49 am

Agree with all who say Mike did a whiz bang job in the interview. And why the heck didn’t they let him talk about the TC prez candidates? Kind of a timely and interesting topic, no?

Now, to Fox Business in general. What a great opportunity wasted so far. If they had shows with interesting, sharp hosts … and if they presented truly interesting ‘Main street’ content, brick and LOTs of Click, more Tech Crunchy topics … then they’d have a chance at building audience. First reports say their viewership is single digit thousands each hour, so it’s in the pooper. I am not a Fox basher like others. I was hoping the channel would offer something different and compelling to give a viable alternative to the more ‘executive suite-ish’ CNBC.

The breakfast show is awful. I wince when they go to one of their reporters, who’s standing 30 feet away on a raised platform with laptop … like a mini dance stage in the distance. Now I’m picturing Ross and Monica doing ‘their dance’ at the Rockin New Years Eve party.

The Happy Hour show is a decent and creative concept. But geepers it’s annoying. Liz Claman is their best personality, but the poor thing gets drowned out by her overbearing counterpart.

I vote Mike Arrington for a regular Techcrunch ‘blog on TV’ segment.
fizetés + állás

January 30th, 2008 at 9:51 am

@43: you say ONLY 100 clicks per user

BUT:

1) a part of the price for the click is going to the publisher, if we say half of the 50 cents, than they need already 200 clicks

2) 100 (or 200) click per user in average are a lot of clicks, since many user does not click at all, so others have to click more

let me tell you, how many google ads have you already clicked in your life? me perhaps 30, not 30

so I need another 15 years to fulfil my task on such a deal (:
fizetés + állás

January 30th, 2008 at 9:55 am

sorry, I misspelled this in @47:

me perhaps 30, not more
Why attack Yahoo?

January 30th, 2008 at 9:57 am

Mike, Why attack Yahoo?

Google was one who kick you off Google Jet. Don’t tell us is “different”.
They really kick off Google Jet.

Why attack Yahoo?
rapbap

January 30th, 2008 at 9:59 am

Ugh, this show needs help. Too much head bouncing, hand gestures and “bricks and mortar” (WOW, I’ve never heard THAT term before). Shoot me.
Adam Sharp

January 30th, 2008 at 9:59 am

I’m just amazed that Google’s stock has gone down so much. They’re still cheaper than Yahoo on a forward P/E basis.
Google health stock will drop

January 30th, 2008 at 10:18 am

Google stock will drop soon if they release Google health search engine. Most Investors are not so impress with Google Health concept. They are willing to drop the price on Google health. Did Google give startup companies a chance to create their own health search?

No… They starting to get greedy. Creating job inflation; putting classism at risk; giving health insurance companies access the profiles.
Alex Linhares

January 30th, 2008 at 10:21 am

I wouldn’t discount yahoo yet, Mike.

The “fat tail” will always be mainstream. The long tail will always be algorithmic. The “middle tail” will be social.

Yahoo isn’t mainstream media, nor algorithmic (like Google). From this point of view, I think what they should do becomes clear: They should strive to dominate the middle space.

Yahoo should go beyond del.icio.us and acquire digg. And subordinate its strategy to having all content, including ads, brought by social voting. If an ad is buried, let it go; just like every piece of content. In the short-run, only ads from Apple will appear; in the long-run, only good, socially targeted content should arise.

Having you seen bad algorithmic contextual can get? They are simply nasty, and, as a cognitive scientist, the semantic web dream is, I will bet anyone, years and years away; at least a decade. I’ve blogged about a potential strategy for Yahoo’s at http://www.capyblanca.com/2008.....y-for.html
James

January 30th, 2008 at 10:26 am

From the interview I got the distinct impression you were very quick and keen to diss Yahoo.
The interviewer hadn’t even mentioned Yahoo - your first comment was:
‘Yahoo is in trouble’
Later he said how about Yahoo vs Google - in an instant you said ‘Google’ (ok fine I guess at the moment that is pretty obvious).
But maybe you should disclose your interests. You were saying that Microsoft should buy Yahoo or that hedge funds should look to buy it in pieces.
What shares do you own (or the interests you represent) Michael? Clearly not Yahoo!
sam

January 30th, 2008 at 10:32 am

Yahoo! - Should have, would have, could have…bottom line…there’s no Forward “Original” Thinking. Yang takes over as CEO when things go really bad. Where was his voice, his expertise to guide Yahoo! between 2003-2007?
Lou Gerstner

January 30th, 2008 at 10:45 am

Hi. I am available to turn around YHOO. Who says elephants cant dance?
Angry Boss

January 30th, 2008 at 10:50 am

Listen you f*ck asses layoff yahoo employees…

If you want to work our startups. Don’t f*ck around and start creating blogging groups.
Kyle

January 30th, 2008 at 10:53 am

Michael, Fox Business is building a rep for chaging things up on guests at the last minute. Lucky for you, you did quite well on the hot seat and made some very interesting points. I wrote about your run-in and our previous run-ins with Fox Business here…

http://racetalk.wordpress.com/.....%e2%80%a6/
Don Jones

January 30th, 2008 at 11:42 am

Yahoo is definitely facing some “headwinds”, as they put it on their recent conf call. I suspect they’ll muddle through and partner their way to relevancy.
prophet

January 30th, 2008 at 12:41 pm

just a couple of techies underestimating yahoo´s power.
Love Y!

January 30th, 2008 at 1:18 pm

Yahoo is not in any kind of a trouble, its only trouble is that it is being compared with Google.
Even its Q4 results shows that they are not in losses, but the only thing is that the profits are not upto the mark. Im sure Jerry will be very keen in focusing on the big fat tail main stream of Yahoo to improve the results for the next quarter.

And i think Mike is more keen is making yahoo down which he conveys by the title he chose for this article: “Let’s trash Yahoo”.
jasonmcintyre

January 30th, 2008 at 1:23 pm

That is amazing that the group of companies with the most visited websites on the planet (according to alexa.com) could be taken over by Microsoft.
rubu

January 30th, 2008 at 1:50 pm

The breakfast show is awful. I wince when they go to one of their reporters, who’s standing 30 feet away on a raised platform with laptop … like a mini dance stage in the distance. Now I’m picturing Ross and Monica doing ‘their dance’ at the Rockin New Years Eve party.
Dirk Diggler

January 30th, 2008 at 2:11 pm

Fox has more people at the bar than watching the show from home.
Andrew Horowitz, CFP

January 30th, 2008 at 2:37 pm

How about a AOL/Yahoo! merger. Have you noticed the website design. Check out this snapshot and tell me that it they do not share the same graphics/web team.
Something is fishy…

http://www.thedisciplinedinves.....oo-merger/

Andrew
Jenkins

January 30th, 2008 at 2:41 pm

How incredible, Mike. Maybe *someday* Yahoo will have to make some tough decisions? Wow! Talk about going out on a limb and making bold statements. Are you kidding me? These shocking rumors are patently obvious to any serious Internet person in the know. Good try!
Larry

January 30th, 2008 at 3:25 pm

Why in the world would you agree to go on Faux Business Channel? They have at peak like 6500 viewers and zero credibility! Please Michael! Save yourself while you can!
jcool617

January 30th, 2008 at 6:09 pm

Yahoo is still the number 1 destination portal for the over 21 crowd. Its top seller is great E-mail. It has strong media/news in Finance, Fantasy Sports, etc. Content is expensive, perhaps Semel belongs in the movie business. Maybe yahoo can buy Amazon or Ebay. If they want to be a social networking destination, they can expand Yahoo Groups. They have all the elements, e-mail, IM, pics, communities - they just have to tie it all together. I would focus on being a White-Label destination like Ning. Create small or large social networks that people care about and the Users will be loyal.
Jurado

January 30th, 2008 at 8:07 pm

I love Yahoo…you always have other options…:-)
David Mackey

January 30th, 2008 at 8:33 pm

I like Yahoo. I use it as my start page, though I use Google for search. But thats okay. Yahoo needs to keep experimenting with search, but there is probably a lot of fat to cut in many departments across the company. But they also need to recognize that search doesn’t have to be their bread and butter. movies.yahoo.com is excellent. their email client is great. their elections coverage i love. their news summaries are fascinating, etc. etc.
BillyWarhol

January 30th, 2008 at 9:11 pm

I hope + pray Yahoo! doesn’t fall into the clutches of MicroPOOP altho it is an obvious possibility*

If they do fall i hope the Purple + Yellow + Sweet Flickr PINK colourz replace the Butt Ugliest baby blue we’ve been Gagging on the past 20 Yearz*

;PPP
Varon

January 30th, 2008 at 10:56 pm

Honestly, I’d rather Microsoft buy out Google. I mean Bill could surely buy out Larry and Sergey Brin and still have enough change to buy them over once again just for thrills.

Google has made it a habit to not “compete” but rather buy out competition. Their model shows their intrinsic weakness at innovative competition. Their fear psychosis knows of no other solution than to buy. This is the bottom line of a weak cash cow company with no algorithmic sense.

They thought they’d make the internet a great place with their PR system. Lo and behold, they made an utter mess of their Page Rank theory with they themselves selling off PR 10 links to small businesses in the guise of “listings” and “success stories”. Today, the first page of every prominent search query is loaded with their top advertisers like Sallie Mae, Lending Tree etc. Why? Because these sites, in Google’s opinion have the world’s best content for top financial keywords or is it more to do because they have huge advertising budgets with Google?

Okay… then they start getting after parked domains which in their opinion hold no value to their visitors. Great… ! And so they come up with their own Google Parking program to give their visitor the most lilting user experience on the internet …er “their internet”. Did anyone know, that these parked pages use Google feeds? Sweet Hypocrisy exemplified.

Well, things did start turning sour for Google when they had to make payouts for rampant click fraud on their ultimate search engine. I guess, they blamed it on their partner networks. Because holy Google can do no wrong… Nah… they just want to give their user the ultimate experience. A world where you use Google search, Google Mail, Google Checkout, Google Ads, Google Tool Bars to Check Your PR, And of course Firefox.

If you look a bit more carefully, Google is definitely turning into the internet Walmart. A time will soon arrive when this wondrous holy internet patroller for sanctity and virtue will make your every move on the internet a Googly move. Google candies…Google toys… with easy checkouts… and many more goodies.

With their money power, even a talk show could be paid for by them to bash Yahoo or Microsoft.., I mean, its a Google world. And to think that this company is what it is based on 1 fragile truth… “it made its fortunes by people trusting its search results as the aboslute best, coming to it day after day for free, and Google making money off these free visitors… with nothing else to offer than a crawler bot, …the day these visitors look the other way, …the rest is history.
I Am Not Posting To Spam My Blog

January 31st, 2008 at 6:47 am

Don’t be too hard on Fox for giving you the wrong topic - at least they interviewed the right guy. A few months ago a BBC staff member walked into reception asking for ‘Guy’ to come through, meaning the white fuzzy-haired technology expert Guy Kewney who was due to appear as a pundit on BBC News 24. A rather large, bald, black man called Guy Goma who was there for a low-ranking job interview stood up, and was promptly shoved in front of a camera and asked about an Apple lawsuit verdict, whereupon he semi-convincingly blagged his way through the whole thing live on air.

The BBC is arguably one of the most professional broadcasters in the world. The Fox Business Channel (lol) has bigger things to worry about than not knowing why the hell its guests have come on their show.
chris hill

January 31st, 2008 at 9:42 am

As an advertiser i have used yahoo for years and i can tell you that his stock deserves to go under. Yahoo treats advertisers with total contempt in my opinion. They are rude, impossible to get on the phone and generally the most aweful people to deal with. Yang needs to fire the ignorant morons in their marketing dept and start again, unless he does this he has no hope whatsoever, thats the truth and they cannot get away from it.
Charles

January 31st, 2008 at 11:29 am

As a current employee of the Yahoo! all I can say is this company will pick itself back up, its not going to happen overnight, but we’re stirred in the right direction. Have hope people, infrastructure changes have already begun and the impact has been positive so far.
Philippe Chrun

January 31st, 2008 at 8:49 pm

Yahoo! has a Chinese CEO and is gonna become bigger in China, the soon-to-be world’s #1 internet market. Something to think about… Unless Guan Xi doesn’t mean sh*t anymore
raj

February 1st, 2008 at 8:58 am

This is a great news for users,webmasters and Advertisers (but not for Google)
The WWW will be surely more competitive again….
The Search will get better…

http://www.Find1234.com
Andy

February 2nd, 2008 at 11:41 am

Nice call here, Mike. 2 days is all it took.
chrispuravida

February 22nd, 2008 at 8:14 pm

did it occur to any of you that this guy arrington is lying? that it is possible that fox business did tell him the topic? that he is a blogger desperate for attention and knows that fox is an easy target? based on what i’ve seen of happy hour it doesn’t seem like a show that would do this. and what’s more…what’s the point of ambushing him about… yahoo? something he freely admits he knows how to talk about. worst case scenario here is some kind of communication mixup. this guy sounds like a loser and an asshole. and you are a bunch of sorry asses for taking this hook line and sinker.
chrispuravida

February 22nd, 2008 at 8:16 pm

in fact now that i look at their banner they were even using his blog name in the segment brand. this jerk is that unappreciative that he goes on their show, they basically promote his stupid blog, and then he slams him. what a classless asshole.