Out Of The Ashes: Two Surprising Companies Top List Of ‘Hottest Internet Companies Of The Year’

Author: May 18, 2013 10:57 am
Yahoo CEO, Marissa Mayer; image @DoomsDaddy

Yahoo CEO, Marissa Mayer; image @DoomsDaddy

For any online business – certainly, online journalism – the health, welfare and public reach of large internet media companies that spread news around the world is always pertinent. Beyond social media like Facebook, Reddit, Twitter, StumbleUpon, Tumblr, etc., every business – both on or offline – relies on the search engines and profile-raising capabilities of sites like Google, Yahoo, Bing, and AOL to help push their product and drive interested parties to their brand. Of course, it’s long been held that dinosaurs like AOL and Yahoo have not only become antiquated in that job description, they’re postivitely ‘uncool,’ with their currency and hip quotient diminished accordingly.

So there was something of a collective gasp when, on the anniversary of the infamous Facebook IPO, compiled statistics of the companies with the top-performing stocks of the year since that event were… Yahoo and AOL.

I can hear the keys that have been tapping out their death notices for years suddenly stop.

The companies with the top-performing stocks may surprise you; graphic courtesy of Statista

The companies with the top-performing stocks may surprise you; graphic courtesy of Statista

In a Slate article bluntly titled, The Hottest Internet Companies of the Past Year Were Yahoo and AOL, writer Will Oremus lays it out:

AOL, of all companies, has seen its stock soar from $26 a share in May 2012 to more than $37 today—almost the exact inverse of how Facebook’s shares have performed. Its fellow dinosaur Yahoo has done even better, leaping from around $15 last year to over $26 today. If you had the foresight (or orneriness) to buy shares in those two companies instead of Facebook a year ago, congratulations: You’ve earned the right to party like it’s 1999.

In AOL’s case, CEO Tim Armstrong’s bid to reinvent the company as an ad-supported media business finally showed signs of progress in the past year. Meanwhile, the company somehow manages to keep raking in some half a billion dollars every year from dial-up subscribers, more than offsetting the losses in its other divisions.

At Yahoo, new CEO Marissa Mayer has engineered what may be a more sustainable turnaround. She has succeeded in shaking up a moribund corporate culture by buying hot startups, bringing in star talent, and cracking down on employees who were using “I’m working from home” as an excuse to slack off. Her anti-telecommuting edict drew a lot of flak, but it seems to be working.

Which seems to make the case that everything old can become new again… or at least stock-worthy! One can assume that AOL’s 2011 $315 million dollar acquisition of media giant, The Huffington Post, which, powered by its charismatic founder, Arianna Huffington, is both ubiquitous and influential, has brought the aging company into the 21st century and positioned it to be the player it appears to have once again become. Naysayers were perplexed by the sale when it happened, but given the fresh blood pumping the brand, as well as soaring stock prices, it’s clear those who had more foresight are the ones “partying like it’s 1999!”

As for Yahoo, the company has been in the news most recently because of its controversial CEO, another powerful and charismatic female, 37-year-old Marissa Mayer. Mayer brought hope and raised hackles when she left Google in 2012 to come to a struggling Yahoo, committed to turning the company around with a “take no prisoners” attitude. She immediately made clear she was willing to change the corporate culture there and did so by making it mandatory for telecommuting employees to show up at their Yahoo offices. The uproar of criticism from both the Yahoo workforce and some reporting media was intense, but she was not only adamant about her reasons for making the draconian pronouncement, she was also willing to make more welcomed changes on the other end of the spectrum, by extending family leave benefits, for example. Like everything this young, powerful woman puts into play, that too incited discussions about her “saving face” after the telecommuting fracas, but those who know her see it otherwise. Forbes writer, Margie Warrell made this point:

“She’s clearly driven far less by what you or I think and far more by what will serve the best interests of Yahoo’s stakeholders.”

And the numbers for Yahoo stakeholders do seem to be bearing her out. Now Mayer is looking to acquire New York-based blogging platform, Tumblr, which raises the question, will such an acquisition further raise the “cool quotient” of this re-emerging company? In an AllThingsD piece on the story, one commenter was quoted as saying:

“If you could pick a company that fits in with what Marissa Mayer has demonstrated in her career — aesthetics software technology and fast-growing — you could not land on a better choice,” said another source.

Whether the likely Tumblr addition will add to the cachet of the company remains to be seen, but given just the rise in stock value for both Yahoo and AOL, it’s clear something is going their way. Market watchers will surely be interested to see if, at the time of next anniversary of the Facebook IPO, this trend continues. For now, those who held on to their stock, leaped in against all conventional wisdom, or chose to continue with their “uncool” AOL and Yahoo e-mail addresses, it’s nice to feel relevant again… however long it lasts!


LDW_AI

 

Follow Lorraine Devon Wilke on Twitter, Facebook and Rock+Paper+Music; for her archive at Addicting info click here; details and links to her other work: www.lorrainedevonwilke.com.

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