Jerry Yang, CEO,
Yahoo Inc,
701 1st Avenue
Sunnyvale, CA 94089
Dear Mr Yang
I have read with concern and sympathy recent news about Yahoo’s travails. I’ve been using the web since 1994 and working in the new media industry since 1995, and during that time Yahoo has been an iconic brand representing all that is best about the internet. It is a great shame to see the company in difficulty.
From where I’m standing it looks very much as though Yahoo needs a clear raison d’etre and way forward before it can get its mojo back. It has the services, users and eyeballs but it seems to me that Yahoo doesn’t have anything obvious to do with them or any obvious way to monetize them.
I have a suggestion for you, Mr Yang.
I am a shareholder in Blinkx, the self-described “world’s largest and most advanced video search engine”. As I am sure you are aware, Blinkx was spun out of Autonomy some 18 months ago and since then has released a raft of video search-related products including Ad Hoc and the new un-roll feature announced recently. The company has also indexed in excess of 32 million hours of online video, including content from major partners such as MSN UK.
Sadly Blinkx’s technical delivery has not been matched by a delivery of shareholder value. I have been a shareholder for over a year now, and have seen the value of my investment decrease significantly.
Of course global stock markets have had a torrid time of it, and Blinkx management has blamed general conditions for the decline in their stock price. I’m afraid however that I don’t quite buy that. I believe that the inexperience of the senior management team – and the CEO Suranga Chandratillake not least – has been largely responsible for the share price decline. For example, Blinkx has been trying to execute a takeover of Miva, and has in my view – and that of many other shareholders – botched the process very badly. Blinkx made an initial approach at 120c which was rejected, and then some time later delivered a letter to the Miva board ‘reviving’ the offer at 55c. Since when Blinkx shareholders have been kept totally in the dark about whether the offer has been accepted or rejected (indeed, there is even some doubt about whether a second formal offer exists at all).
The ensuing uncertainty is, I believe, what has caused the Blinkx share price to decline to its current parlous state of c13.5p.
This has, however, created a great opportunity for any large technology company looking to acquire a video search engine business.
I am suggesting that Yahoo should launch a takeover bid for Blinkx. I cannot be the only shareholder despairing of management’s ability to deliver shareholder value (by which I mean a strong and growing share price). Blinkx’s IPO price was 45p – the 9 major shareholders who bought into that IPO have seen 65%+ wiped from the value of their investment in only 18 months – and this for a company that claims to lead the world in a red-hot market sector. In the current uncertain market conditions I’m sure these large shareholders would entertain an offer of 50-60p.
Blinkx’s video search technologies coupled with Yahoo’s users and traffic would be a phenomenally powerful – and highly lucrative - combination and could catapult Yahoo back into the premier league of internet companies. Also, Yahoo’s position and reputation could facilitate many deals with third parties (Blinkx currently has 400+ partners large and small and while impressive that is barely scratching the surface) leading to further revenue and a strengthening of Yahoo’s position.
I strongly suggest you look more closely at Blinkx. The company’s management seems to have badly taken its eye off the ball which creates a unique opportunity for you. I would urge you to take it.
Yours sincerely,
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