Silicon Valley has always been unique. Entrepreneurs have been free to follow their dreams—as long as they coincided with the same path to liquidity as that of their venture capital backers.
But its gene pool lacks much of the fresh talent from outside northern California that marks other industrial centers. There’s almost nothing in the history of Silicon Valley and its entrepreneurs that makes me believe any company—most of all Yahoo—can survive a proxy fight like the looming battle between Jerry Yang and Carl Icahn.
Yahoo may be the best example in Silicon Valley of how not to grow a company. In it’s short history, it’s never really been able to create a top notch brand and it’s become a revolving door for talent that’s moves laterally not upward. Yahoo is an artifact from an earlier age; a time when start-ups thought they would become content kings or giant search engine/ information aggregators. Along the way Yahoo lost its focus and it has jumped from haphazardly through a variety of business models, never quite succeeding at anything it tried. Yahoo has become yesterday’s brioche and it really doesn’t appear there’s much that can save it.
To make my point try this: Every time you hear the name “Yahoo” think “[email protected]” Where is this company today? It’s little more than a footnote and absent a near divine miracle, I think Yahoo is doomed to become a subordinate entry in the same footnote list as [email protected].
But if nothing else, the unfolding story of Yahoo should increase the pucker factor for entrepreneurs and their investors. Until now the Valley has escaped predatory investors and take-over kings. But if things are changing Carl Icahn may just be the lead predator in a pack of hungry foxes looking at some of Silicon Valley’s cash plump chickens. Do I think Donald trump is going to invade the Valley anytime soon? Hell no. But there are some companies that have enough cash to make them prime targets.
Take a second and imagine Apple if Steve Jobs’ health were to crash. (Note, I give Jobs and Apple high marks for management of Steve Job’s brief fight with Pancreatic cancer that affected the company’s stock not a whit). If there were a change in Job’s health I believe Apple’s stock price would drop and consumer confidence in the brand would tumble. Add to this Apple’s image as “only one person can manage the beast so we don’t have a strong number two” and you have the picture of a company that could be taken over.
Who would do this? There are two obvious candidates in Silicon Valley—Larry Ellison’s Oracle or Google.
All of this is pure conjecture on my part and I’m not saying it would happen, I’m just noting that takeovers of technology companies are possible and could happen, as, long as the right celestial tumblers line up and the lock that’s heretofore stopped corporate raiders in Silicon Valley pops open.—Jim Forbes 05/17/2008.
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