Several Internet names saw some important strategic and corporate decisions taken this past week with the most significant ones relating to Yahoo’s (NASDAQ:YHOO) decision to fire its CEO of last 2.5 years, Carol Bartz. In addition to this, Google (NASDAQ:GOOG) decidedto retire many of its old products such as Google Desktop and Google Pack. The last week also cast a shadow on the tech IPO market as Groupon deciding to delay its IPO amidst varying controversies that included Groupon violating SEC’s “quiet-period” rules as well as the persistent criticism of the company’s accounting metrics.
Yahoo
While Carol Bartz’s departure was not entirely surprising considering the beating Yahoo’s stock has taken since 2008-09, a change in leadership would be merely cosmetic if Yahoo’s board doesn’t take significant steps to install a new CEO to execute the much needed turnaround.
Among its priorities are better management of Yahoo’s investments in Asia i.e. Alibaba and Yahoo Japan considering that these 2 investments represent a majority of Yahoo’s overall value. Additionally, given that Yahoo has lagged in capturing any mega-trends such as the mobile market and social networking, the company might even want to unlock its Asian holdings using these resources to reinvent and position itself better with the likes of Google and Facebook.
See What Investors Want From Yahoo’s New CEO
See Our Full Analysis For Yahoo’s Stock
What is clear from last week is that Google is increasingly removing any distractions that divert it from its core business. However, the company’s decision to shut down many of its non-strategic products (such as Google Desktop and Postini) has received mixed signals. [1] While on one hand it reflects Google’s increasing resolve to focus on its core businesses like Android, Chrome & Motorola, the decision also raises questions on whether Google is still encouraging its employees/developers to innovate as much as it did earlier.
Late this week, Google also acquired the popular restaurant reviewer – Zagat. [2] The purchase will complement Google Offers – the company’s local deals offering, which should benefit from Zagat’s “industry standard” ratings as well as its three decade old reputation as a leading reviewer of restaurants.
See Does Google’s Product Shake Up Signal a Shift in its Culture
See Google Offers Adds Zagat’s Ratings and Recognition to Local Deals Business
See Our Full Analysis For Google’s Stock
Groupon
Messing with the SEC’s rules is a bad edea! Groupon learned this the hard way as the company finally relented and decided to delay its much-hyped IPO. [3]
Since Groupon came out with its S-1 registration statement in June 2011, the company has been rife with controversy with the financial press slamming its controversial accounting metrics as well as concerns over Groupon’s long-term profitability and viability. To make matters worse, CEO Andrew Mason’s leaked memo to Groupon employees was clearly a violation of “quiet period”, in which soon-to-go-public companies are not allowed to make any public statements on their future outlook. [4]
Given Groupon’s accounting, regulatory and public relations issues, the SEC’s decision to delay the IPO is better late than ever. On the bright side, it gives prospective investors more time to track Groupon’s performance and its viability in the long-term.
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