Companies on the Road South

I mentioned last week at the WTIA Predictions Dinner that Jerry Yang’s act of refusing Microsoft’s $33 / share offer for Yahoo! may have been the greatest disservice to shareholders in recent memory.  That followed an earlier prediction in the SNS newsletter that Yahoo! stock would act like a reverse rocket if they turned down the MS offer.

All of which leads to the category of Companies on the Road South, often exacerbated by the current economic climate, but almost always already in dire straits for some other reason.

Here are three obvious nominees for this dubious award:

Yahoo!  Although my friend Matt McIlwain thinks Disney is the likely white knight here, whoever gets it will be paying almost nothing for the privilege.  And if top officers keep leaving, they will be getting almost nothing, too.

Nortel.  One of my tests for companies headed south: I can’t tell you their strategy in a sentence.  And wanting to sell products, or being the coolest company in Ontario, do not qualify as goals or strategies.

Sun.  With the final sunsetting of its proprietary server edge, due, in my opinion, over the next twelve months, exactly what business does that leave Sun in?  Selling free Java kits?  Giving away Office competitors software?  Writing blogs?

Sun, Nortel and Yahoo! have been great companies in their time, but each lost direction, loaded up on way too much hubris, and blew the ego/value ratio out the door, on the way to that fabled Road South.

One hopes they’ll find happy homes inside some other company somewhere, since they still have many skilled employees who deserve better, and since the chances of them being an independent company a year from now are vanishingly small.