Public Companies and Wall Street

Since January, I have followed Microsoft’s Yahoo! acquisition proposal, and then withdrawn, and then semi-proposed [search only], and finally the ending of the discussion. And the last statement to come back to the deal table only if Carl Icahn is able to replace the Yahoo! board. In between all of this, Yahoo! lost most of its senior executives and executed another re-organization; the executives of the two companies issued conflicting statements, and blamed each other for tanking the discussion of a merger or partial acquisition.

In all of this, I have also concluded that that the Wall Street’s never ending desire to make as much money as possible [in short term] provoked discussions and actions that otherwise would have been much more civil, less controversial and could have resulted into a friendly good deal also.

So, I do wonder. Yes, we all want to make money. But would anyone be ok making money by selling his soul? In case of an Internet company, the soul of the company is its products and users of those products. If your CEO makes a statement that creating the shareholders value is the most part of his job, isn’t he putting the money before the soul – products and users? So, is Wall Street capitalism such a vicious spiral that the more you spin around it, the more you care about just money, and just ignore the products and users – who could make or break your business?

None of us will get to know the real stories of the meetings that happened between Microsoft and Yahoo!, but personally, I am just disappointed on how Yahoo!, Microsoft and Mr. Icahn have handled it. Microsoft approach made it hostile. Yahoo! has gone to the point of begging for the deal. And Mr. Icahn just wants to make money of the stock he has bought. In all of this, no one really cared about the product overlaps and resulting confused users.

Perhaps, the reality of the Wall Street capitalism is to torpedo the companies through its greedy approach of short term gains. And the system recovers itself as new companies come along and users move on. In the Internet, we have seen that happening to AOL, Excite and other early Web 1.0 portals. However, I do consider Yahoo! a bit different as it still does have the right talent to make it happen. At the same time, the recent departures of executives and the stories of technical employees leaving for greener pastures could make it difficult if too many people do end-up leaving. Microsoft, which still loses money in its Internet business unit, is not the right answer due to their vast cultural differences. And lastly, I still think, the companies are too deep in the vicious Wall Street stock price cycle to come out of it and make best possible decisions for the users and products.

When I started working 8 years ago, I always wanted to complete my project as early as possible to move to the next one. And that attitude resulted into some bad decisions that gave me life time lesson of “There is no short cut to success”. Therefore, I strongly believe that the involved technology companies, who are competing in this hyper competitive environment, can still bounce back and slowly become a very strong player. All it would take is the right leadership, technical talent, and maniacal focus on the long term aspects – products and users – over the Wall Street short term forces.