I'm reading RSS feeds for the first time in over a day and just came across Yahoo Emerges From Dot-Com Gloom which seems to do a good job of summarizing the highs and lows from the last few years at Yahoo. Yeah, it's a bit dramatic in places ("After a mortifying two-year slump") but pretty good overall.

Well, it was good right up until the end when I read this.

Yahoo's early $10 million investment in Google is likely to be worth hundreds of millions if, as expected, the online search leader goes public this year. Semel says he hasn't decided if Yahoo will sell the stock to help finance its own future expansion.
"I haven't given much thought to Google's IPO," he said. "We've been too busy taking advantage of all our opportunities around here."

Oh, please. How stupid does he think people are? I don't doubt that people at Yahoo have been busy. I see it every day. But the bit about not giving Google's IPO much thought really sets of my bullshit detector.

Let's think about this. One of Google's main competitive assets right now is the fact that it's private. They don't have to tell anyone jack shit about their revenue streams. Yahoo's management has to make guesses. Yes, they're educated guesses, but they're still guesses.

Going public changes all that. Google then has to publicly report certain financial data every single quarter. Do you expect me to believe that the folks at the top of Yahoo aren't dying to see those numbers?

Come on.

In fact, as a shareholder maybe that should set of warning signs. When a company is too busy to even pay much attention to one of their competitor's most important financial events, should you start to wonder even a bit?

Posted by jzawodn at January 16, 2004 12:41 AM

Reader Comments
# Tony Bowden said:

In the UK a company's annual accounts are public information, whether they're public or not. I'm not sure if this is true in the UK. However, if Yahoo are a shareholer in Google, they should be entitled to financials anyway. Shareholders really shouldn't be guessing about how well their company is doing!

on January 16, 2004 02:32 AM
# Manish Jethani said:

Well, congratulations, Yahoo! You've been my favourite “portal” (is that word dead?) since I started using the web.

on January 16, 2004 03:42 AM
# Jeremy C. Wright said:

The main reason Google will IPO is that under the tax rules it has to declare financial statements now anyways. It would have been a private company without any of the benefits.

on January 16, 2004 04:46 AM
# wil said:

If Yahoo was a shareholder in Google, they'd have access to all the information they need.

on January 16, 2004 05:19 AM
# Bob Monsour said:

Two things. JZ, I suspect that Semel's comment to the press was just a way to deflect the question. There is really no benefit IMO to him getting into a public discussion of how Yahoo views Google strategically and then have to talk about Yahoo's various options for responding to what information comes out of a Google IPO.

Second, Jeremy Wright, while Google has to report its numbers to the IRS for taxes, that doesn't mean those have to be publicly declared (if there are new laws affecting this, I could be wrong, but it's not my current understanding).

Ok, three things, depending on the nature of the $10 million investment, Yahoo *may* have gotten what are called "information rights", which are often requested by large investors in private financing deals. These "rights" typically require that the company periodically provide financial reports or other "info" to the investor. These are negotiated at the time of the deal and are typically provided to those investors above a certain threshold of investment, say a holder of 5-10% of the stock.

on January 16, 2004 05:31 AM
# Jeremy Zawodny said:

Jeremy Wright is right. Google is following in Microsoft's footsteps on this one.

on January 16, 2004 07:38 AM
# Bob said:

Kind of ironic how Yahoo will undermine Google's IPO by dropping them as search provider.

on January 16, 2004 11:31 AM
# Terry Semel said:

When you get done posting to your blog, I'd like to see you in my office.

on January 16, 2004 02:56 PM
# Zack said:

How quaint!

on January 16, 2004 03:14 PM
# Ricky said:

Quaint indeed.

on January 16, 2004 04:07 PM
# Zack said:


on January 16, 2004 11:27 PM
# Daniel said:

I believe Yahoo should hold on to that chunk til the end.

on January 20, 2004 07:32 AM
# BillSaysThis said:

I'm thinking that Semel's comments was more likely about what to do with their google stock post-IPO than Yahoo's competitive situation with the big G.

on January 20, 2004 08:49 AM
# Daniel said:

Yes, they should hold on to it post-IPO, and for a long time.

on January 20, 2004 09:22 PM
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