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“There is no determination by the board to sell the company or any part of it,” said Yahoo chairman Maynard Webb, after a verrrryyyy long pause following a question by a Wall Street analyst about why the heck the board of the Silicon Valley Internet giant doesn’t just suck it up and sell.
Later, someone else asked the same thing of Webb on a conference call about reversing the spin of the previous spin of its stake in China’s Alibaba Group, of why it was not selling the company proactively rather than reactively, as will be the case in spinning it out now.
“We have made no determination to sell the company or any part of it,” said Webb again, clinging to the script to save his life. “We think the best path is separating the Alibaba assets and trying to improve the performance of the operating business which we are very focused on doing.”
In other words, we have effectively put a for-sale sign on Yahoo, but we are not going to say so because we can’t. And, most of all, we don’t want to say we really screwed up our tax planning on a transaction that should have been our crowning glory.
Instead, Webb noted that “we believed the forward spin maximized shareholder value and, frankly, provided more tax benefits.”
Well, activist shareholder Starboard Value did not think so and essentially won a victory without firing a real shot by forcing this new reverse transaction, after it pressed Yahoo to change course. Message to Webb: It will still want more, via a sale of the company, especially since this new plan will take a year, according to Yahoo.
For those not paying attention, Yahoo had planned to spin off the Alibaba shares, but an inability to get a tax-free ruling from the Internal Revenue Service had created an untenable position with its investors.
Just before, Yahoo CEO Marissa Mayer — a typically frenetic Silicon Valley entrepreneur who sounded simply deflated over having her tenure hang of a botched tax transaction (I feel for you, Marissa!) — had noted that “we certainly do appreciate simplicity.”
She was answering another question as to why the company did not just distribute the Alibaba shares and be done with it. Mayer managed to sputter something about “taxes upon taxes,” but could really say little else.
You could practically hear her internal dialogue: I once ruled the Google search box and it’s come to this!
Yes, it has — Yahoo is officially a tax trick and not a product company.
“We have heard shareholder feedback,” said Yahoo CFO Ken Goldman.
“What happened? There was so much optimism here,” asked CNBC’s Jim Cramer, pretty much summing up the situation, this morning.
Indeed. Somewhere, Yahoo co-founder Jerry Yang is weeping.
Later, on CNBC, appearing with Webb, Mayer gamely defended these latest moves, saying Yahoo was better than it was before she got there.
Asked whether she agreed with the board decision. “We remain really aligned … it was a unanimous decision,” Mayer said.
And again, CNBC’s David Faber questioned the wisdom of not just selling off the core business, which is declining.
“We believe in Yahoo,” said Webb.
Faber then asked if he and the board had “confidence in the lady sitting next to you” — a gallant but slightly awkward way to describe Mayer in this moment, but let’s move on.
“We want to help her return this great company to its iconic place,” said Webb.
The lady sitting next to him silently nodded in agreement, as the ongoing Yahoo drama churns on.
By the way, Yahoo shares are hardly budging in pre-market trading on the news.
This article originally appeared on Recode.net.
