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The share price of newly debuted Facebook stock is seen at the Nasdaq stock market moments after it went public on May 18, 2012. The company still hasn't seen the share price climb back to IPO levels.
Remember the so-called "Facebook Effect?" That was the tax windfall that California was expected to get as a result of the Facebook IPO creating a legion of overnight millionaires. It was identified back in January.
According the Mercury News, "Gov. Jerry Brown and state lawmakers in June approved a $91 billion budget that included $1.9 billion in expected tax revenue from Facebook employees striking it rich — a rare projection that helped stave off cuts to schools and programs for the sick, poor and disabled."
Now the LAO says that "a big chunk of the extra state revenue" — hundreds of millions — "resulting from the IPO won't materialize" if Facebook's share price doesn't reverse its current downward diving trend (it made a decent start today, ascending more than 8 percent in midday trading, but it's still way below its IPO opening price of $38).
Carol Bartz is out as CEO of Yahoo, reportedly fired by phone call yesterday. Bartz was brought in to turn the Web pioneer around and redefine its identity after founder Jerry Yang and his board failed to sell company to Microsoft in 2008 and former Warner Bros. executive Terry Semel failed to turn Yahoo into a kind of full-service online media machine.
Back in 2008, when the Microsoft deal fell through, I wrote about how Yahoo, the key company of the Web 1.0 era, hooking up with Bill Gates and all that was definitely not of the Web 1.0 world was the only hope we had of beating back Google and its total dominance of Web 2.0. But that was before Facebook achieved critical mass.
Now Yahoo looks even more desperate and confused — even as observers acknowledge its still-massive Web presence. The company's identity crisis — which Bartz, a Silicon Valley veteran, tried to cure by returning Yahoo to its core as a tech firm — took root during the Semel years and culminated in 2006 when an executive wrote a scathing memo now referred to as the "Peanut Butter Manifesto."