Yahoo launches new Messenger app in face of possible big changes

Industry waits to hear if Yahoo board this week will decide on sale, Mayer's future

As Yahoo tries to breathe new life into its Messenger service, some industry analysts say it may be too little too late for a company mired in rumors of a possible sale and executive turmoil.

"I always say that companies should be throwing ideas against the wall to see what sticks, and then they should build on that," said Jeff Kagan, an independent industry analyst. "But Yahoo hasn't had an idea stick to the wall in more years than I can remember. I know they're trying everything they can to salvage a future for Yahoo but, at this point, I think the writing is on the wall. It's too late."

The company announced Thursday that it's building on the idea of its popular instant messaging client that's been around for 15 years. Yahoo is pushing out a Messenger for mobile, the Web and Yahoo Mail, and said it will support the old Messenger service for only a few more months.

The new Messenger is designed to make it easier to create groups, enable users to like others' photos or messages and unsend text messages, photos and GIFs.

The news comes as Yahoo's board holds a reported three days of meetings largely focused on whether the company should sell its core Internet business, including Yahoo Mail, its news and sports sites and potentially even its search business.

The board also reportedly is discussing whether Marissa Mayer , the company's CEO for the past three years, should be shown the door after failing to execute a dramatic turnaround at the company, which has slid from being an Internet pioneer to a financially struggling second-tier company.

Reports have been circulating about both a potential sale and about Mayer's future. While the company hasn't commented about any possible moves, analysts point to Yahoo's continued struggles to support the speculation.

Robert Enderle, an analyst with the Enderle Group, said he doubts that Yahoo will make a public announcement about any decisions made until at least the end of this week, if not until the next week.

"Decisions are in flux and leaks would make it far harder for them to successfully conclude this effort," he told Computerworld. "Mayer is fighting for her corporate life. I have my doubts whether she'll survive this, but I also don't think she is the big problem. She is a capable manager and could likely be successful with better support and direction."

Whether Mayer is to blame could be irrelevant if the company is presenting an image of trying to turn things around.

"These efforts tend to focus on blame and not on problem resolution," added Enderle. "I continue to hope folks will be smarter than this and I continue to be disappointed."

Patrick Moorhead, an analyst with Moor Insights & Strategy, said Mayer should be given more time to work with Yahoo, but he's not sure she'll get it.

"I'm expecting something big as the board needs to show action," he said. "It could be Mayer's removal, some sort of divestiture, or a strategic repositioning. It's not that Mayer has messed anything up or made obvious poor choices. It's just that people were expecting more results quicker. A major turnaround takes five years, and Mayer should be given that much time as long as she is hitting her interim goals."

One issue is what would be left of Yahoo if it sells off its core business. Would the Yahoo that everyone has known for the past 20 years still exist?

The board also is expected to take on a potential spinoff of the company's stake in Alibaba, a Chinese e-commerce company. The move, which has its critics, could save Yahoo from a large tax bill.

"Can Yahoo be turned around? Yes of course. With the right CEO and vision and a hell of a lot of luck," Kagan said. "Unfortunately, we don't know which path is right and we've seen Yahoo waste years trying different paths. There is a limit. The only question we have to ask is has Yahoo reached that limit?"

Copyright © 2015 IDG Communications, Inc.

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