Management Advice For Yahoo

Many have made it a big deal how Yahoo has become so deep in trouble with regards to legal issues and other management concerns. Here are some advice from analysts and opinionated individuals as reported by Businessweek.com

1. Bernstein Research analyst Jeffrey Lindsay advised in a Jan. 11 report that Yahoo fire 2,000 employees. He said that would give Yahoo more profits to pursue initiatives such as mobile search and video as well as acquisitions. The company is mulling layoffs, but more in the range of hundreds of employees. Deeper cuts, flagged privately by people at Yahoo as unlikely, sound more like wishful thinking by investors than sound advice. They presume that Yahoo is stumbling toward death's door when it's not: In its fourth-quarter report Jan. 29, the company is expected to show a 15% gain in sales, to $1.4 billion, though profits are expected to fall.
   

   Yahoo's major acquisitions over the past year, such as Right Media, BlueLithium, and Zimbra, surely created redundant positions. If they haven't been eliminated already, it's time.
   
   

2. Lindsay and others also think Yahoo should give up on its search efforts and just pay Google to drive its search engine. It's easy to understand why. Yahoo keeps losing search market share to Google, whose engine handles from 56% to 66% of all queries, depending on who's counting. By contrast, Yahoo's share is usually from 18% to 21%. "The text-ad war has been lost," says Scott Rafer, CEO of ad network Lookery and former CEO of MyBlogLog, which Yahoo bought a year ago.

   But others think Yahoo would be crazy to cede such an important front, not to mention control of the Web's most lucrative advertising opportunity. "It's a pretty critical component of getting people to start with Yahoo and stay there," says Ned May, director and lead analyst at market researcher Outsell. Just as important, data from searches, still the most important indication of a user's intention to buy, ultimately may prove crucial for targeting display ads to individuals as well.

   Notably, marketers and ad firms are rooting for Yahoo because they want a stronger No. 2 just to keep Google honest. "I would hate to see Google become almost a monopoly," says Lee. If Yahoo can keep making even mild progress in search advertising—its revenue per search rose 20% in the third quarter—keeping it in-house seems worthwhile.

3. If there's one rumor that keeps coming back again and again, it's this one. And with every replay, the speculation seems ever more driven by investors looking for a quick exit than by any actual deliberations by Yahoo or Microsoft. The software giant, which only last year spent the most it has ever put into an acquisition with the $6 billion purchase of aQuantive, seems unlikely to put up the upwards of $27 billion it would take to buy Yahoo. Such a deal would also carry big risks, as the merged company would likely lose even more ground to Google in the time it would take to integrate Yahoo's and Microsoft's operations and businesses.



4. In an impassioned call on the blog GigaOm on Jan. 22, Mitra advised Yahoo to forget about downsizing and "please put up a fight." She said Yahoo has an unmatched opportunity on the emerging new Web, which she views as being dominated by highly specialized services. So, she advises, Yahoo should consider buying jobs site Monster.com (MNST) to complement Yahoo HotJobs, photo service Shutterfly to go with Yahoo's Flickr site, travel sites such as Expedia (EXPE) or Priceline (PCLN) and more, to fill out the portal's strengths in these specialized markets.

   Problem is, Yahoo doesn't seem to have the resources to get this aggressive. Its cash position of $2.2 billion trails laughably behind Google's $13 billion stash and Microsoft's $19 billion trove. And the stock market clearly isn't valuing Yahoo's shares enough to make them a powerful currency for deals. As much as Yang may want to follow this path, it's unlikely he can.

Tale Of 2 Rivals: Intel vs AMD

In a Market Watch Article, we see both AMD and Intel gain ground on the forefront of slightly lower performance levels in terms of profit and revenue targets. The article continues to say that as far as the market is concerned, they do play the two off of each other at times, and at other times, they reward and punish them both," said analyst Crawford Del Prete of International Data Corp.

Indeed, the two companies will be long remembered for one of the great rivalries in the business world, a battle between a dominant giant and a scrappy underdog. Think Ali vs. Frazier or Bjorn Borg vs. Vitas Gerulaitis. Although given their almost symbiotic bond, some would probably compare them more to Laurel and Hardy or Felix and Oscar.

Historically, he said, Intel and AMD have demonstrated different sets of strengths, and AMD has had always had a tougher bar to clear than Intel.

Intel's advantage is its manufacturing muscle which makes up for "some of its architecturally less elegant designs." On the other hand, while AMD has won praise for the quality of its chips, it has struggled with production and has been repeatedly criticized for missing roll-out targets.

"AMD has to be precise in both," he said. "They have to have better architecture and manufacturing. They have to be right on two counts. ... Intel has the luxury of having more cash and they can survive a two-year downturn" better than AMD.

For, in a strange way, Intel, the world's No. 1 chipmaker, seems to need the smaller AMD as a foil on the tech stage, and AMD needs Intel in order to play the role of the little guy battling the big gorilla.

Analyst Roger Kay of Endpoint Technologies Inc. said each of the two rivals "is pursuing its own imperatives, and any action it takes can be seen as a straightforward reaction to its capabilities, circumstances and character."

But he noted, "Intel would likely face greater antitrust scrutiny if AMD went out of business, and AMD has gotten so used to operating in a climate dominated by Intel that its character has been formed around the obstacle."

For the full article, please go to Marketwatch.com

Missing Data on 650,000 Credit Card Holders?

Beware of consumer fraud and identity theft. These days there's so much information that consumers and businesses have a joint responsibility to safeguard information.

If you have a credit card for Penney, you should probably cancel it right now. Recent new from Associated Press mentioned that personal information on about 650,000 customers of J.C. Penney and up to 100 other retailers could be compromised after a computer tape went missing. GE Money, which handles credit card operations for Penney and many other retailers, said Thursday night that the missing information includes Social Security numbers for about 150,000 people.

The information was on a backup computer tape that was discovered missing last October. It was being stored at a warehouse run by Iron Mountain Inc., a data storage company, and was never checked out but can't be found either, said Richard C. Jones, a spokesman for GE Money, part of General Electric Capital Corp.

Penney said it had been told of the situation and referred further inquiries to GE Money.

Jones declined to identify the other retailers whose customers' information is missing but said "it includes many of the large retail organizations."

Jones said GE Money was paying for 12 months of credit-monitoring service for customers whose Social Security numbers were on the tape.

Incidents like this add to consumer concern about fraud. The Identity Theft Resource Center says there was a six-fold increase last year in the number of records reported compromised in the United States — to 125 million.

Data breaches can stem from hacking, as well as the physical loss or theft of computers of data storage equipment.

TJX Cos., owner of the T.J. Maxx and Marshalls retail chains, reported last year that tens of millions of credit and debit card owners were exposed to fraud when hackers stole data while it was being transmitted wirelessly.

It took GE Money two months to reconstruct the missing tape and identify the people whose information was lost. Since December, the company has been notifying consumers in batches of several thousand and telling them to phone a call center set up to deal with the breach. The notification is expected to be completed next week.

"I think the average consumer has thrown away that GE Money letter because they don't know it's about J.C. Penney," Rich said. "Not everybody opens junk mail."

Management Tips As Chrysler Goes Global

Weak revenue streams from the US market now has Chrysler taking a more serious look at global markets.

According to Wall Street Journal, the auto maker, which relies on North America for about 90% of its sales, is planning to bolster its dealer network in Russia and China this year in hopes of benefiting from the rapid growth in those two big, developing markets, Mike Manley, Chrysler's international-sales chief, said in an interview.

So what's the strategy? Well here are some of them as quoted from Wall Street Journal

1. Chrysler boosted the number of products offered overseas to 20 from nine. In China, Chrysler said it is reintroducing Dodge-brand vehicles after a 62-year absence. The Caravan minivan is in production. The Caliber hatchback and Avenger sedan are also slated to be sold in that country.
2. The auto maker has started using recruitment teams, investment forums and the promise of large territories with more products to expand its dealer network overseas.
3. They hired key management - CEO, Philip Murtaugh, who spurred GM's growth in China, this past September.
4. U.S., incentives will be kept to a minimum as the auto maker sticks with its vow to curtail production rather than fill dealer lots, North American sales chief Steve Landry said.
5. Chrysler is in the midst of eliminating shifts at five North American plants, resulting in job cuts of 8,500 to 10,000 hourly workers. The cuts are slated to be completed by April.
6. Introduction of the Dodge Journey, Chrysler's redesigned Dodge Ram pickup truck and the hybrid version of the Chrysler Aspen and Dodge Durango to bolster sales.

These are their plans, whether they'll work or not only time will tell.

Ten Likely Business Events in 2008 By Business Week

Here are 10 likely occurrences that are set to happen in 2008 as predicted by the geniuses in BusinessWeek. As entrepreneurs and managers, it is imperative that we keep an eye out for things that are to come and certainly affect our business. We should also be doubly vigilant as to acting in real time in response to these events.

Green Crisis

There will be a backlash in the green movement after it becomes clear that many of the companies claiming to be green are in fact nothing of the sort. Businesses that proclaim they are "carbon neutral" will find that such proclamations no longer carry much weight among far more skeptical media and consumers.

Airline Consolidation Begins

At least one major U.S. airline will buy another in 2008. The most likely scenario is that Delta Air Lines (DAL) will go after Northwest Airlines (NWA), United Airlines (UAUA), or JetBlue Airways (JBLU). When that happens, others will scramble to cut their own deals. Certainly, no airline wants to be left stranded as a solo operator if Clinton or Obama ends up in the White House and taps the brakes on industry consolidation. The main drivers for such combinations will be the shabby finances many companies will see in 2008 and the argument that the U.S. economy and business require a healthier industry. What's more, airlines that restructured in bankruptcy have some new private equity and hedge fund owners that will demand returns.

Bloomberg's Historic Run

New York Mayor Michael Bloomberg will enter the Presidential race in February, after it becomes clear which nominees will get the nod from the major parties. His multiple billions and organization will impress voters—and stun rivals. He'll look like the most viable third-party candidate since Teddy Roosevelt. But Bloomberg will come up short, as he comes in for withering attacks from both Democrats and Republicans. He and Clinton will split more than 50% of the votes, but Arizona's maverick senator, John McCain, will end up the country's next President.

Bye-bye, CDs

The music industry is in crisis. The key reason is that CD sales are plummeting. Now, it's going to get worse. This year, the most important retailers, including Wal-Mart Stores (WMT) and Best Buy (BBY), will look to radically downsize their CD sections. Perhaps there will be no more than one aisle, chock-full of mainstream pop titles. Digital music will continue to grow in influence, from iTunes (AAPL) and Amazon.com (AMZN) to ad-supported site such as imeem and fast-growing upstarts like Pitchfork.

Facebook Fatigue

Social network fatigue will set in as people tire of getting yet another invitation from so-called friends to join yet another social network. And, in the wake of Facebook's fumbled social ads initiative, it will become even more apparent there's no obvious way to pitch products on these sites without turning off members. Social features will wend their way into all kinds of Web services, from search to news, but the gold rush in social networks themselves will begin to wane.

Finally, Internet TV

For years, gearheads have dreamed of getting all that video from the Internet onto the big 52-inch screen in the den. But it's a pain. Look for that to change in 2008. While Apple TV has been a dud, Steve Jobs & Co. will make an aggressive play this year for the most important screen in the house. Perhaps Apple will even make a gorgeous TV itself, with all the necessary Net capabilities inside. And if Apple can't do it, someone else will.

The Biggest Bribe Penalty Ever

German electronics giant Siemens (SI) will agree to pay more than $1 billion in fines to avoid prosecution by the Securities & Exchange Commission and the U.S. Justice Dept. on charges it paid hundreds of millions in bribes to win foreign contracts. The fine will shatter the previous record fine under the Foreign Corrupt Practices Act. Siemens will also agree to allow compliance monitors to set up shop in its Munich headquarters to ensure the company has cleaned up its act.

Web Crash 2.0

If a recession finally hits, Web 2.0 companies will find there are neither enough ad dollars out there for all of them to survive on, nor enough big corporate buyers such as Google (GOOG), Microsoft (MSFT), and traditional media companies to buy them all out. What's more, venture capitalists may decide that momentum looks better for clean-tech investments than for Web startups that depend on a cyclical business like advertising. So more will join the "DeadPool," as the Web startup blog TechCrunch calls its list of failed companies.

Crude Oil Will Top $100

When will the world see $100-per-barrel oil? Paul Horsnell, head of commodities research at London-based Barclays Capital (BCS), is betting that 2008 will be the year. Horsnell thinks the prediction is a slam dunk, though he doesn't believe $100-per-barrel oil itself has any great significance. Horsnell bases his prediction on broad fundamentals in the industry, which he says are reflected in the behavior of the futures curve for oil prices. Despite six years of rising prices, demand continues to grow—especially in China and the oil-rich Middle East—while new supplies have been disappointing. These are key reasons that futures prices for oil five to seven years out have been moving steadily up in recent years to the $85-per-barrel range at present. Horsnell believes that such prices, which attract relatively little press coverage, are a proxy for long-term, sustainable oil prices. At the same time, the near-term prices, which do get people's attention, have been very volatile, ranging all the way from $50 per barrel to almost $100 per barrel in 2007.

Big Brother Fears Return

For a decade, a Net-happy world has cheerfully shared personal information online, with relatively little mainstream concern over privacy. Now, the issue may come to the fore, as carriers and cable companies deploy click-tracking software and publicity about China's Olympian Internet oversight leaks into the news.