The Yahoo Inc. (Nasdaq: YHOO) board of directors isn't getting roaring applause from investors for its appointment of PayPal president Scott Thompson as the Internet search engine provider's new CEO. After the announcement of Thompson's appointment, Yahoo's stock price fell 3 percent on Wednesday and continued the decline in pre-market trading on Thursday. Investors, it seems, don't much like the move, nor do they see it as a panacea for whatever ails Yahoo.
It isn't about to get a ringing endorsement from me here, either. Thompson might turn out to be Yahoo's much-desired savior, but there's no denying the extensive damage that has been done to the company by the dithering of the board of directors and their inability to take difficult decisions in the past. It has lost significant ground to Google in the search engine market, and it's failed to expand into other market areas where it could leverage the millions who visit the site daily.
Yahoo didn't have to be in this position. The company is troubled today partly because co-founder Jerry Yang didn't recognize a great deal when one landed on his lap. This is the bottom line: Yahoo should have sold itself to Microsoft when it had the opportunity four years ago. In February 2008, Microsoft offered to purchase Yahoo for approximately $46 billion. Yahoo declined the offer and has since been stuck in a rut. Today, Yahoo has a market value of about $19.7 billion, about where it was when Microsoft made its offer in 2008.
BlackBerry (Nasdaq: RIMM; Toronto: RIM) has a lot to learn from Yahoo's experience. Hopefully, it isn't too late for the Canada-based BlackBerry phone maker. Just as the best deal that could have led Yahoo out of the murky waters was turned down by Yang, RIM has reportedly also declined overtures from Amazon and Microsoft. (See: Six Strategic Options for RIM.)
The muddle RIM is in was a creation of its co-chairmen and co-CEOs Michael Lazaridis and James Balsillie. Lazaridis founded the company in 1984 and with Balsillie built a great company that once dominated the smartphone and enterprise messaging markets. Unfortunately, neither seems to understand how to migrate the company to a new level. Rather than carve out a definitive growth future that may involve some sort of partnership, they are holding on tightly to a sinking ship and desperately grasping for flotsam to help it stay afloat in the middle of the ocean. Help is nearer, though, even if it may have to come from nearby and bigger vessels -- competitors, telecom partners, or even new entrants into the market, including Amazon.
What RIM needs is a new direction and a drastic change of course, but are the current CEOs able to provide this -- even if this might result in their departure -- or will they rather hold on tightly to the bitter end? The company faces major challenges: Its products aren't as hot as they were, rival designs are selling faster, the enterprise market it once dominated is being attacked (successfully) by Apple and Android-device makers, and the window of opportunity for making a deal is closing, slowly but surely.
This is why Yahoo's appointment of a new CEO, years after it received a great acquisition offer, can serve to remind RIM shareholders and directors that there is a time "to hold 'em" and a time to "fold 'em." Just in case they don't know, here's a part of the lyrics from Kenny Rogers's "The Gambler." I hope RIM's co-CEOs get it:
You got to know when to hold 'em,
Know when to fold 'em,
Know when to walk away,
Know when to run...
RIM may not need to fold, but, as the the song continues:
The secret to survivin'
Is knowin' what to throw away
And knowin' what to keep.
I am interested in your thoughts on what RIM should be throwin' away and what it should keep.
@t.alex, dont you think RIM's distinctive features of BBM such as end-to-end security worthy of valuable asset? And besides, if consumers of smartphones are more security concious, Blackberry users may have increased in numbers. RIM's OS security feature, i think more trusted compare to Android OS.
I think at this point RIM's best bet is to merge or be sold to another company or to license out its OS and products. One of the nest things RIM has going for it is their mail service. No other platform allows multiple email accounts to be managed and work efficiently like Blackberry's. For this reason alone my wife, who has upwards of 8 different accounts because of work and personal email, can't get rid of her Blackberry to get another OS. If another platform could utilize the email service and give great features, my wife and many other Blackberry users would be on board in a heartbeat.
@Anna, I like the application of the song lyrics to your argument. I once did a post in that vein on businesses using social media using the song "Getting to Know You" from The King and I.
@Anna: Sometime person becomes possive for quite ccomplex reasons. He/She may not pass controls to his own children. In hindsight, this may be normal life cycle of most business empire. They may last few decades and after that they succumb to new entrants. RIM has not so long period due to nature of its field.
@Eldredge, It's good the company is considering various options. It is still a speculation that RIM has agreed to licence its software to Samsung Electronics co.ltd and HTC corp. This indicates the urgency of situation facing RIM. Would review to license its software a good move? I really don't know. Plus it's not been confirmed yet. What is crucial at this stage for RIM, is the urgency to decide on the next probable direction.
@Bolaji, It's obvious this is probably the cause of misdirection within the organisation. If two can't work together, then it's best they tender their resignation. I think it's time for this change. It is owed to the company's shareholders.
@Eldredge, RIM's management changes is a good move. Merely replacing the co-chairs (Mike Lazaridis and Jim Balsillie) is a wise move, however, would it bring the quick expected turn around? I very much doubt this. I think further management restructure is still required.
Well, regardless of whether the relationship between the co-CEOs is good or bad, it deson't seem like a responsive management structure. Maybe it also indicates that they are afraid to makea decision, which isn't a good situation either.
The new government rules and regulations may prove to be a double-edged sword: achieving some positive goals but costing organizations a great amount of money and work and, perhaps, lost sales as well.
EBN Dialogue enables and encourages you to participate in live chats with notable leaders and luminaries. Not only editors and journalists, but the entire EBN community is able to comment and ask questions. Listed below are upcoming and archived chats.
Archived Dialogues
Thailand Stages a Comeback Join EBN contributor Jennifer Baljko on Thursday August 23, 2012, at 11:00 a.m. EST for a live chat on how electronic manufacturers in Thailand have shored up their supply chain to reduce the impact of future natural disasters.
Euro-Crisis: What It Means for High-Tech Firms Join EBN Editor in Chief Bolaji Ojo and Contributing Editor Jennifer Baljko on Thursday, July 12, at 10:00 a.m. EDT for a Live Chat on high-tech and Europe's economic difficulties.
Microsoft Surface: Potential Winners & Losers What are the implications for the electronics industry supply chain of Microsoft Corp.'s decision to launch its own tablet PC? Join industry veteran and EE Times' systems and OEM expert Rick Merritt on Tuesday, July 3, at 12:00 pm EDT for a Live Chat on this subject.
Join EBN contributor Jennifer Baljko on Thursday August 23, 2012, at 11:00 a.m. EST for a live chat on how electronic manufacturers in Thailand have shored up their supply chain to reduce the impact of future natural disasters.
Peter Drucker famously said "Trying to predict the future is like trying to drive down a country road at night with no lights while looking out the back window." Yet in the razor's-edge world of electronics—with a lean supply chain and just-in-time demands—the need to know the future is vital.
While no one really can accurately predict the future, we can take guidance from another Drucker saying which is the best way to predict the future is to create it.
You've heard the saying "the No. 1 supply chain risk is your people." That hasn't always been the case. But today's complex global supply chain requires a new type of multitalented employee. It's one who understands, finance, marketing, economics, is savvy with technology, graceful with relationships and can think analytically.
Where are these people? Are universities properly preparing the next generation supply chain professionals? How do train your existing workforce for these new, demanding positions?
Brian Fuller, editor-in-chief of EBN, will lead a 60-minute Avnet Velocity panel discussion that will ask and answer these and other questions swirling around today's supply-chain talent challenges.
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