Yahoo launches millions on food, botox and glam parties

Against the background of depressing news about Yahoo's income, gossip about free iPhones and Botox for employees sounds surreal. Only staff food costs the company 108 million dollars a year, despite the fact that for the third quarter of 2015, Yahoo's net profit did not reach 80 million. CEO Marissa Meyer does not skimp on expensive purchases - for the benefit of the company, of course. However, while the mock glamor does not pay off, and the giant continues to stagnate. Mashable analyzed, to which Yahoo spends underpaid millions.

Is Yahoo an IT company or media company? The question remains unanswered for over 10 years. He was asked by Steve Jobs after his visit to Yahoo's headquarters in 2007. And in 2014, CEO of Yahoo, Marissa Meyer asked not to ask about this anymore.

However, what about the fact that in pursuit of fashion and "coolness" the company spends millions on the purchase of talents? Investors breathe Marissa in the back of the head: the company spends on people and infrastructure as much as silicon tech-giants, and earns as a non-profit media company.

Marissa has not yet decided, but investors have decided. Yahoo - as a spirit-emitting media company - is left either to sell in whole or in parts, disassembled to the bone. In short, it's time to abandon the big "reversal" of Yahoo.

Hey, spender!

For Meyer, one sinner was spotted as a CEO: she spends a lot of money. Whatever she bought - the big name Katie Couric (American TV host, journalist and producer - Ed.) or hot startup Tumblr - in pursuit of a new image of an aging technogiant, she is thrown money to the right and left. At first, these expenses looked like a knight's move, but now they seem more like ordinary window dressing.

Yahoo employees enjoy free iPhones and food while Marissa has great Gatsby and Wizard of Oz parties.

She hires celebrities with big names to close top positions, and pays them wages several times higher than the highest stakes in the media business. Yahoo star Katie Couric, according to the latest intelligence, earns 10 millions of dollars a month, while her activity has not sparked a surge of reader interest. And recently, Yahoo for the post of Glavred media site lured the former top Time Inc. Martha Nelson - on a salary of five million dollars a year. For comparison, the iconic editor in chief of Vogue Anna Wintour earns two million dollars.

SpringOwl's managing asset manager, Eric Jackson, one of the most uncompromising critics of Meyer, recently wrote a plan to turn Yahoo on 99 pages. It states that over the past four years, Meyer’s unbridled spending has cost the company 450 million dollars.

SpringOwl insists on the need for a new leader in the company, the dismissal of nine thousand employees, the sale of the main campus and other actions to make the company more financially attractive for a potential buyer.

“The world's largest startup? You know a lot of startups in the world who spend 108 a million dollars a year just on food for employees? ”The letter says.

On condition of anonymity, one of the Yahoo employees told Mashable that top-rated colleagues can cover their own expenses at the company's expense. One of the editors, for example, paid for Botox injections, and also ordered a bed for a photo session for eight thousand dollars, which was then delivered to his home. Yahoo covered all the expenses for it, and then sent an email to the staff asking them not to spend money on things that did not benefit the whole team.

Such purchases at the expense of the company were common, while the company’s media business and marketing was led by Katie Savitt (Martha Nelson, who replaced her, is said to be more resilient).

And Yahoo also adores corporate parties. A collective photo session in the style of "The Wizard of Oz" cost the company about 70 thousand dollars. Approximately the same cost was the recording of the video “Watch Me (Whip / Nae Nae)” for a holiday party in the company. A party in the style of the "Great Gatsby" SpringOwl estimated at seven million dollars!

Meanwhile, at the very beginning of the Yahoo food chain, there are contract employees who carry the entire media business of the company: video production, maintenance of the main site, which accounts for the main traffic. And for the upkeep of these people, Meyer does not spend even a thousandth of what her “expensive purchases” cost.

According to SpringOwl, which cited Yahoo's stock price fluctuations, Marissa spent more than three billion dollars to buy companies that investors now value at zero dollars.

…Who is there?!

Meyer seems to be pursuing people's conjectures about who or what Yahoo might be. It can be compared with the Dollar General (e-commerce-company) for the Internet, which, although not sexy, is quite a worthy business. But Marissa, apparently, wants Yahoo to be cool and fashionable, because she turns the company into a glamorous party for girls and reconstructs not an elegant but powerful home page.

The reality for Yahoo is that despite all the attempts to be cool, it still looks more like Dollar General than like the chic Barney's that he wants to be.

A purchase can completely change the situation and direction of the company. When AOL bought Adap.tv, an online advertising video platform, this eventually led AOL to sell Verizon for 4,4 a billion dollars - but the same purchase would have little effect on Yahoo’s core business — selling advertisements in media and web. Search.

Meyer must be commended for the fact that, under her leadership, Yahoo quickly mastered new, more monetary advertising formats, in particular video, mobile, native and social advertising - without them, things in the company could go a lot worse now. But purchases of startups and big names, as well as the transition to new formats only delayed the end of Yahoo.

Yahoo resembles a giant who rakes in tons of money and cannot be ignored - for the third quarter of 2015, the company received 1,23 billion dollars in revenue - but turned them all into 76 million dollars in profits. And in the previous quarter, Yahoo lost 22 million dollars.

Not sold

In the days of past glory, Yahoo was one of the dominant technology companies associated with the Internet itself, and a haven for the most advanced IT professionals. It was Yahoo 1.0, the king of the 1.0 network.

Now the world is dealing with Yahoo 2.0: the company tried everything to integrate into a new era, but it managed a little. However, there is a ray of hope - Yahoo has invested in the Chinese e-commerce giant Alibaba, and this share today is worth billions of dollars. But even this piece is about to leak through your fingers. Alibaba has become the most expensive part of Yahoo today, so Yahoo's reversal plan includes every effort to save the value of its portion in Alibaba. But this could take the whole of the next year.

Yahoo's main shareholder, Canyon Capital, is not surprised. The fund reported that Meyer allegedly found a buyer. "The market is already assigning a huge negative cost to the company's main business and its assets, and, in our opinion, this delay will inevitably cause a further decline in value ... We are sure that the surest way to complete the process is not through striving for some kind of another uncertain" reversal " , but rather through the immediate launch of the sale procedure, ”says the letter to Canyon Capital.

However, nothing says that this letter somehow influenced the opinion of Meyer. “I’m still confident that Yahoo is on the best and the right path,” she said at the last conference. And at the same time she looked as if she herself did not believe in her words.

Previously "Forum" писал about how troubled employees can ruin or bankrupt the company. It was also noted that Yahoo’s CEO Marissa Mayer, who gave birth to twins on Thursday, December 10, said that will take "limited time" because she is healthy and the pregnancy has passed without complications.