Watching the American Choppers Behind the Scenes Special
Let’s call it months since the deal was announced. That’s $ million a quarter. $ million a day, days a week, for nine months. At this rate, the entire billion will be gone by the end of the summer.
Hey, Pizza and Jolt Cola are Expensive in China
Now granted, he says that it’s been spent on research and development and “other projects.” But without casting any aspersions or making any accusations, nearly any CPA or tax lawyer you talk to will tell you that both of those categories can (in practice) be interpreted very broadly. And the company is looking at further investments.
The first question that leaps to the top of anyone’s mind is okay, where did the money go? I’m not sure the general public will ever get to know, that it is really any of our business, or that it really matters anyway. It is entirely likely that everything is above board, as we have been given no reason (except for a monstrous sucking sound) to think anything is amiss. Yahoo! and its shareholders are certainly satisfied that their money has been well spent. Because if they weren’t, they would be calling for a SWAT team of forensic accountants to drop in with their arsenal of tools and start following money trails. Frankly, as a minority shareholder, I’m not even sure what rights Yahoo! has to even do this much.
But again, this is a diversion (albeit a titillating one for corporate scandal fetishists) from the real question.
That’s Funny. The Site Still LOOKS The Same…
Where’s the return on investment? Where are the tangible results of the spending? Because remember, $ million was more money than it took Google to get where it is today. It would have bought MySpace nearly three times. And it would have bought outright a dozen promising, profitable companies in the online or mobile content space in China.
Was the money spent on research, development, and “projects” that will eventually wind up adding value to the company, to the Yahoo! brand, and providing a more valuable service for customers? Is the money going to show up in the form of unique services, powerful new features, and cool tools that are going to thrust the company out ahead of Baidu, Google, and everyone else?
Ask Not For Whom The Clock Ticks…
For the sake Jack Ma and his reputation, I sincerely hope so. For $ million dollars, Mr. Ma is now under a lot of pressure to come up with a game-changer, a business that is going to disrupt the rest of the search sector and become the equivalent of a Google or a Microsoft in the PRC. Time and money are running out, and the industry is moving ahead. Mr. Ma has proven himself an astute dealmaker. What remains to be proven is his ability to actually run a business.
The stakes are no less high for Yahoo!, for whom the count is now stands at – in China. Having failed with their first stealth entry strategy, they paid a small fortune to buy search technology firm and place it’s founder in charge of Yahoo! China. When that gambit came apart less than months after the ink had dried, Yahoo! spent a year looking for another solution, and found Alibaba. What is at stake now is whether Yahoo! will have a business in China at all.
Yahoo! has some exceptionally smart people on the payroll. If it fails in China after three costly, high-profile attempts while its rivals continue to bootstrap their businesses into moneymakers, those smart people are going to have a lot to answer for when they face their shareholders.