Yes To Facebook and These Techs, No To Face Time
AnnaLisa is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.
Mommy blogs are all a-twitter, and twitter is all a-flutter about the Yahoo (NASDAQ: YHOO) internal memo ordering telecommuters back to the office. It's been more than a week since the internal memo about the change was released and the web is still flooded with indignant posts.
The Huffington Post, among other media outlets, has been framing this as a family vs. face time showdown. Marissa Mayer is being called hypocritical because she built and paid for a baby nursery next to her office and herself worked from home after her baby's birth. What's more worrying is that telecommuting was a benefit she's withdrawn from formerly satisfied employees despite her quest to improve morale.
On the other hand Facebook (NASDAQ: FB), headed by CEO Mark Zuckerberg, is offering employees who are about to deliver a child $4,000 to help out. Is that a nod to family values or just a forward-thinking employee incentive? At least it offers disgruntled Yahoo! employees some ideas on their next employer.
The political opiners will get in their jabs; work at home vs. mothers shouldn't work at all, entitled employees, etc. Overthinking this isn't getting Yahoo! anywhere, the fiat is seen as anti-family at the same time as anti-feminist, and even bad for the environment.
If people want to work at home and are productive, what's the difference as Sir Richard Branson argued, especially with the telecommunications advantages that Yahoo! surely enjoys. Parents and caregivers aren't the only ones that may prefer to work from home; single people have personal or family issues that may make them prefer telecommuting, too.
Reports say that Mayer was dismayed by empty Yahoo! parking lots which would never happen at her former employer, Google (NASDAQ: GOOG). Big difference, Google doesn't have Yahoo!'s morale problem.
Aside from the obvious advantage of getting people off the roads as IBM (NYSE: IBM) boasted on their corporate web page on the environment," In 2011, in just the U.S. alone, IBM's work-at-home program conserved approximately 6.4 million gallons of fuel and avoided more than 50,000 metric tons of CO2 emissions, " telecommuting also allows rural communities to prosper. Besides IBM, most of the tech giants don't have this overweening need for face time as All Things D writer Kara Swisher pointed out in a followup to her original release of the internal e-mail.
Will The Best And Brightest Stay?
Eventually, this telecommute to-do will ebb. Certainly, a few people abuse the privilege of telecommuting but that could be handled on a case-by-case basis. Studies have shown that workplace flexibility enhances productivity and a majority of large companies have at least tried flexwork initiatives. An infographic from Working Mother shows flextime is so desirable for employees that they would take a 10% pay cut.
Mayer is a driven CEO and the youngest woman to head a Fortune 500 company. The stock had risen over 30% since she took the helm. But Yahoo! employees have had five CEOs in almost as many years and promising young talents were already opting out of Yahoo! until Mayer came on board. Their best and brightest may have less reason to stay now.
Yahoo! is trading at an interesting 6.92 P/E and hit a 52 week high of $20.74 on March 4. However, Google and IBM have been outperforming for some time, hitting 52 week highs fairly regularly, and both have excellent employee benefits and more productive employees.
Those investors who see hard line tactics like job cuts and employee crackdowns as good for a stock need to dig deeper into a company's and its industry's culture to see if it's appropriate and productive. Facebook may seem awfully generous to employees with this "Baby Cash". However, the younger workers it needs are in the catbird seat and their generation demands a certain freedom and support. Especially if they can't expect the lifelong job security common at companies like IBM when it was Big Blue.
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IBM and Google are just much more solid companies. Since IBM became more of an IT and software support company than hardware provider its stock has soared. Over a century old, IBM's motto is still THINK and they have been at the forefront of global tech all that time. And they don't THINK face time is as necessary for innovation as 29% of employees telecommute just as large percentages do at Aetna (47%) and Booz Allen Hamilton. IBM is trading at a 13.86 P/E with a 1.70% yield and a 1.20 PEG. IBM has more than doubled since its 2009 low.
Google has been on fire, outperforming competitors Apple and Amazon the last few months, hitting an all-time high of $808.97 on February 20. Their operating margin is 16.61% and they have a 14.80 forward P/E with a 1.27 PEG. If they only had a yield but they do have tablets, Android, search, cloud, and now Google glass.
Facebook may be the speculative name here but sentiment grows more positive for them as they approach the anniversary of the IPO. The forward P/E is 34.67. Fool Steve Heller gives good reasons why Facebook may soon be the mobile juggernaut it's been promising with a strong push into emerging markets.
Yahoo! still generates heated debate over this move with headlines generated hourly. Good news about the stock is falling through the cracks like the analyst upgrade by Barclays to outperform and giving it a $26 price target. With all this swirling around Yahoo! a step back may be prudent until, hopefully Mayer is able to dial this back.
leglamp has no position in any stocks mentioned. The Motley Fool recommends Facebook and Google. The Motley Fool owns shares of Facebook, Google, and International Business Machines.. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. Is this post wrong? Click here. Think you can do better? Join us and write your own!