Carol Bartz, CEO,
Yahoo! Inc.
701 First Avenue
Sunnyvale, California 94089
United States of America
6th November 2009
Dear Ms Bartz
It’s good to see that Yahoo is starting to recover its former position as a leading internet property – and I think the ad campaign you are running in the UK at the moment is very effective. I hope the deal with Microsoft will provide some revenue stability from which to re-commence the growth of the company.
In order to grow revenues, it might be worth thinking about making some strategic acquisitions.
If that were to be considered, could I suggest Blinkx?
It has just released interim figures showing that revenues have doubled again, and that although costs have also gone up we are assured by management that costs have now levelled off. The company claims still to be on target for profitability in full-year 2010.
Unfortunately, due to the fact that management doesn’t seem to think that the markets or shareholders have a right to know anything about anything – and in particular has refused to release any details about the recent takeover of Zango – the share price is still languishing and many shareholders are very angry indeed about being kept in the dark.
Which is of course why I’m writing to you today – I am one of those very disgruntled shareholders. I have held shares in Blinkx for more than 2 years, but frankly have given up hope of ever seeing the return on my investment which I hoped for when I invested. My own view of the company is that while they have fantastic technology – and technologists – the management team are too concerned with technology for its own sake and completely ignore their responsibilities to shareholders.
However, Blinkx’s technology would make a perfect fit for Yahoo. If you were to put their index of 35m+ hours of professional, longform video with Yahoo’s hundreds of millions of users and monetise the results, it would add up to a very substantial revenue stream.
Again, rolling out their SmartShopper technology to those hundreds of millions of users, and sharing the results with a browser manufacturer, would create another substantial revenue stream.
And all this is to say nothing about their other technologies such as Ad Hoc and Transaction Hijacking: Blinkx can best be summarised as having fantastic technology but, in my view, lousy management. The best hope for shareholders is to see a takeover of the company by a large media organisation which can best leverage their technologies into an existing user base.
Such a deal would be good for the media organisation which took such a risk and good for shareholders of Blinkx for whom a takeover seems to be the best (and perhaps only) chance of seeing a return on their investment.
Such a takeover would not, of course, be good for the management of Blinkx – but since they’ve never given any impression of caring about their shareholders, I for one will not be losing any sleep over them. They’ve never even demonstrated their confidence in the company’s future and their own future delivery of value by buying any shares in their own company – absolutely shameful, if you ask me.
So take a look at Blinkx, Ms Bartz – ansd you may conclude, as I have, that it would be a near perfect fit for Yahoo! – and with a market cap of £55m, very cheap too. The market cap would probably be higher, in my view, if the company’s management had not repeatedly damaged their credibility with investors and the markets – but what has been their loss could be Yahoo!’s gain.
Yours sincerely,
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