7 ms·

Buffett is no fool. Berkshire is providing the financing to Dan Gilbert's group and will receive guaranteed interest as well as an option to convert to equity.

Buffett is no fool. Berkshire is providing the financing to Dan Gilbert's group and will receive guaranteed interest as well as an option to convert to equity. I'm sure that financing is jammed packed with warrants and covenants. Buffett has basically parlayed the prestige of his name into sweetheart deals with provisions that no other company could get (eg. his investment in Goldman Sachs).

samstave 10y ago
But who cares about yahoo? (Serious question) yahoo should just die. Please tell me why it shouldn't
- pbreit 10y ago
  Because it's a global top 5 web property with a billion+ monthly users.
- ergothus 10y ago
  As a consumer, it might make sense to say this. From a business perspective (he says having no business experience or expertise), Yahoo is a collection of assets: Code, people, branding, community. They aren't in first place, and they aren't profitable at the moment, but I think the case that they have zero or negative value is a bit simplistic. Put it another way: Would you rather throw a pile of money at trying to build a collection of code, talent, business contracts, and users from scratch, or would you rather buy an EXISTING collection, on the cheap, and work instead to flip it into a profitable business? Both are risky ventures, but everything I've seen says it's harder to build from scratch than it is to keep existing users. Perhaps your answer is that you'd prefer to build it from scratch, but do you see why - if the answer takes some thought to determine - that someone else might come to a different conclusion? Heck, even if you want to completely toss the business model - even if you want to toss everything they've done and what they are trying to do - I'd imagine the servers, in-house expertise, and collected code and utilities, not to mention any purchased or licensed software, would make Yahoo worth considering as an acquisition.
  - deleted 10y ago
    [deleted]
  - bmuon 10y ago
    Big misconception: Yahoo is profitable, it's just not growing.
    - tosseraccount 10y ago
      Check. https://www.theguardian.com/technology/2016/apr/19/yahoo-quarter-losses-marissa-meyer-shareholders https://www.theguardian.com/technology/2016/apr/19/yahoo-qua... Yahoo announced falling revenues and a quarterly loss of $99.2m on Tuesday - from April 19, 2016
      - taylorwc 10y ago
        You zoomed in on a quarter, which is not a good way to look at it. From an annual standpoint, they have been profitable for each of the last 4 years, excluding 2015. 2015 Included a massive impairment of goodwill (which is not a cash expense) at $4.4B[0] and would have otherwise been profitable. [0] http://www.sec.gov/Archives/edgar/data/1011006/000119312516483790/d12894d10k.htm http://www.sec.gov/Archives/edgar/data/1011006/0001193125164...
      - cscurmudgeon 10y ago
        Just one quarter due to accounting. Annually quite profitable. Ugh, I wish the Guardian was more financially literate.
        easytiger 10y ago
        > Ugh, I wish the Guardian was more financially literate. Then how could it bend the facts to meet their bias?
    - tomkin 10y ago
      Why does it need to grow? Maybe growth is limited, and when it's not, it's dangerous.
- maxsilver 10y ago
  A lot of non-technical older users still use Yahoo properties. My mom still uses Yahoo Mail, and Yahoo.com is her homepage (by choice). I don't know how to quantify what that's worth, but I can't imagine it's nothing.
  - randomThoughts9 10y ago
    At least in Eastern Europe, most developers in the 90's used yahoo (mail + messenger) and a lot of them still do, even though not exclusively anymore.
- dghughes 10y ago
  Because this is why: List of Yahoo!-owned sites and services https://en.wikipedia.org/wiki/List_of_Yahoo!-owned_sites_and_services https://en.wikipedia.org/wiki/List_of_Yahoo!-owned_sites_and...
  - dmix 10y ago
    I forgot they bought Tumblr = 50 million visitors/month https://siteanalytics.compete.com/tumblr.com/ https://siteanalytics.compete.com/tumblr.com/ Yahoo Answers is still a big useless SEO machine = 50 million users/month https://siteanalytics.compete.com/answers.yahoo.com/ https://siteanalytics.compete.com/answers.yahoo.com/ Yahoo Sports is very popular from what I understand = 12 million users https://siteanalytics.compete.com/sports.yahoo.com/ https://siteanalytics.compete.com/sports.yahoo.com/ Yahoo Finance, ditto = 14 million visitors/month https://siteanalytics.compete.com/finance.yahoo.com/ https://siteanalytics.compete.com/finance.yahoo.com/ Yahoo News, ditto = 20 million visitors/month https://siteanalytics.compete.com/news.yahoo.com/ https://siteanalytics.compete.com/news.yahoo.com/ Yahoo mail is still doing alright isn't it? = 50 million users https://siteanalytics.compete.com/mail.yahoo.com/ https://siteanalytics.compete.com/mail.yahoo.com/ Flickr is still ranked pretty high on Alexa but on a definite decline: http://www.alexa.com/siteinfo/flickr.com http://www.alexa.com/siteinfo/flickr.com = 15 million visitors/month: https://siteanalytics.compete.com/news.yahoo.com/ https://siteanalytics.compete.com/news.yahoo.com/
    - simula67 10y ago
      Except for Finance and maybe Tumblr, aren't all these services fading ? * Yahoo Answers Quora ( 100M users [1] ) and Stack Exchange is now the default question & answer sites. * Yahoo News and Yahoo Sports Google news and search ( 44% of Google searchers scan the news results [2] ) already provide these features. I used to use Yahoo Live Scores, but now I use Google. * Yahoo mail Gmail ( 1B users [3] and grew 100 Million users just last year ) * Flickr Google Photos ( 100M users in 5 months [4] ) It seems like Google Finance is losing [5] as they see it as part of search but it appears there is a need for a good separate product here. Tumblr looks to be a runaway success ( 227 million registered accounts, more than double the number of accounts a year prior and more than 37 million unique visitors [6]), no match for Wordpress yet ( WordPress.com records 126M unique visitors per month [7] ), but the social aspects looks to work in Tumblr's favor. [1] http://venturebeat.com/2015/12/21/quora-claims-10-of-u-s-population-uses-its-service-every-month/ http://venturebeat.com/2015/12/21/quora-claims-10-of-u-s-pop... [2] http://techcrunch.com/2010/01/19/outsell-google-news/ http://techcrunch.com/2010/01/19/outsell-google-news/ [3] http://techcrunch.com/2016/02/01/gmail-now-has-more-than-1b-monthly-active-users/ http://techcrunch.com/2016/02/01/gmail-now-has-more-than-1b-... [4] http://www.theverge.com/2015/10/20/9576713/google-photos-100-million-users http://www.theverge.com/2015/10/20/9576713/google-photos-100... [5] http://www.businessinsider.com/google-finance-yahoo-finance-2012-8?IR=T http://www.businessinsider.com/google-finance-yahoo-finance-... [6] http://www.statista.com/topics/2463/tumblr/ http://www.statista.com/topics/2463/tumblr/ [7] https://managewp.com/14-surprising-statistics-about-wordpress-usage https://managewp.com/14-surprising-statistics-about-wordpres...
- nommm-nommm 10y ago
  Yahoo owns both Tumblr and Flickr. Alexa ranks Yahoo News the 8th most popular news source on the Internet. More popular than Fox News, BBC, and WSJ. Yahoo Mail is still used by millions.
  - deleted 10y ago
    [deleted]
  - hellodevnull 10y ago
    This community often seems to think that something is dead just because people don't use it in SCs or in startups, completely forgetting the average person. By their logic Windows is dead, Oracle is dying etc. the only successful companies are Google and Apple.
- lmm 10y ago
  They run a whole bunch of really useful services. Their personalized homepage is still great. If they would just maintain what they've got and stop swinging for the fences - turn into something like the Apache Foundation was in their early years - they'd provide a lot of value for a lot of people.
jhulla 10y ago
Yeah - this is likely a place for Buffett to park some cash with sensible returns/risk for Berkshire. It is not likely to be Buffett jumping into the tech business. My guess is that Buffett's team looked generally at the risks within Yahoo and hedged them with generous covenants on the financing. I am surprised that Gilbert didn't get Wall St financing. I would think that analysts at the big banks could structure a deal more carefully aligned with the underlying risks.
sliverstorm 10y ago
It's probably not just the sheen of his name. A very large, wealthy, & motivated investor can be an asset. I vaguely remember an old story about him; one of his companies was having trouble with their paper vendor. He found out, and promptly bought the paper vendor. Problem solved.
make3 10y ago
isn't yahoo google's failed retarded little brother? I don't see them becoming anything, anytime soon. The only point of this acquisition would be to pivot the whole thing hard or to dismantle it and spread its resources to other assets

samstave 10y ago

But who cares about yahoo? (Serious question) yahoo should just die. Please tell me why it shouldn't

pbreit 10y ago
Because it's a global top 5 web property with a billion+ monthly users.
ergothus 10y ago
As a consumer, it might make sense to say this. From a business perspective (he says having no business experience or expertise), Yahoo is a collection of assets: Code, people, branding, community. They aren't in first place, and they aren't profitable at the moment, but I think the case that they have zero or negative value is a bit simplistic. Put it another way: Would you rather throw a pile of money at trying to build a collection of code, talent, business contracts, and users from scratch, or would you rather buy an EXISTING collection, on the cheap, and work instead to flip it into a profitable business? Both are risky ventures, but everything I've seen says it's harder to build from scratch than it is to keep existing users. Perhaps your answer is that you'd prefer to build it from scratch, but do you see why - if the answer takes some thought to determine - that someone else might come to a different conclusion? Heck, even if you want to completely toss the business model - even if you want to toss everything they've done and what they are trying to do - I'd imagine the servers, in-house expertise, and collected code and utilities, not to mention any purchased or licensed software, would make Yahoo worth considering as an acquisition.
- deleted 10y ago
  [deleted]
- bmuon 10y ago
  Big misconception: Yahoo is profitable, it's just not growing.
  - tosseraccount 10y ago
    Check. https://www.theguardian.com/technology/2016/apr/19/yahoo-quarter-losses-marissa-meyer-shareholders https://www.theguardian.com/technology/2016/apr/19/yahoo-qua... Yahoo announced falling revenues and a quarterly loss of $99.2m on Tuesday - from April 19, 2016
    - taylorwc 10y ago
      You zoomed in on a quarter, which is not a good way to look at it. From an annual standpoint, they have been profitable for each of the last 4 years, excluding 2015. 2015 Included a massive impairment of goodwill (which is not a cash expense) at $4.4B[0] and would have otherwise been profitable. [0] http://www.sec.gov/Archives/edgar/data/1011006/000119312516483790/d12894d10k.htm http://www.sec.gov/Archives/edgar/data/1011006/0001193125164...
    - cscurmudgeon 10y ago
      Just one quarter due to accounting. Annually quite profitable. Ugh, I wish the Guardian was more financially literate.
      - easytiger 10y ago
        > Ugh, I wish the Guardian was more financially literate. Then how could it bend the facts to meet their bias?
  - tomkin 10y ago
    Why does it need to grow? Maybe growth is limited, and when it's not, it's dangerous.
maxsilver 10y ago
A lot of non-technical older users still use Yahoo properties. My mom still uses Yahoo Mail, and Yahoo.com is her homepage (by choice). I don't know how to quantify what that's worth, but I can't imagine it's nothing.
- randomThoughts9 10y ago
  At least in Eastern Europe, most developers in the 90's used yahoo (mail + messenger) and a lot of them still do, even though not exclusively anymore.
dghughes 10y ago
Because this is why: List of Yahoo!-owned sites and services https://en.wikipedia.org/wiki/List_of_Yahoo!-owned_sites_and_services https://en.wikipedia.org/wiki/List_of_Yahoo!-owned_sites_and...
- dmix 10y ago
  I forgot they bought Tumblr = 50 million visitors/month https://siteanalytics.compete.com/tumblr.com/ https://siteanalytics.compete.com/tumblr.com/ Yahoo Answers is still a big useless SEO machine = 50 million users/month https://siteanalytics.compete.com/answers.yahoo.com/ https://siteanalytics.compete.com/answers.yahoo.com/ Yahoo Sports is very popular from what I understand = 12 million users https://siteanalytics.compete.com/sports.yahoo.com/ https://siteanalytics.compete.com/sports.yahoo.com/ Yahoo Finance, ditto = 14 million visitors/month https://siteanalytics.compete.com/finance.yahoo.com/ https://siteanalytics.compete.com/finance.yahoo.com/ Yahoo News, ditto = 20 million visitors/month https://siteanalytics.compete.com/news.yahoo.com/ https://siteanalytics.compete.com/news.yahoo.com/ Yahoo mail is still doing alright isn't it? = 50 million users https://siteanalytics.compete.com/mail.yahoo.com/ https://siteanalytics.compete.com/mail.yahoo.com/ Flickr is still ranked pretty high on Alexa but on a definite decline: http://www.alexa.com/siteinfo/flickr.com http://www.alexa.com/siteinfo/flickr.com = 15 million visitors/month: https://siteanalytics.compete.com/news.yahoo.com/ https://siteanalytics.compete.com/news.yahoo.com/
  - simula67 10y ago
    Except for Finance and maybe Tumblr, aren't all these services fading ? * Yahoo Answers Quora ( 100M users [1] ) and Stack Exchange is now the default question & answer sites. * Yahoo News and Yahoo Sports Google news and search ( 44% of Google searchers scan the news results [2] ) already provide these features. I used to use Yahoo Live Scores, but now I use Google. * Yahoo mail Gmail ( 1B users [3] and grew 100 Million users just last year ) * Flickr Google Photos ( 100M users in 5 months [4] ) It seems like Google Finance is losing [5] as they see it as part of search but it appears there is a need for a good separate product here. Tumblr looks to be a runaway success ( 227 million registered accounts, more than double the number of accounts a year prior and more than 37 million unique visitors [6]), no match for Wordpress yet ( WordPress.com records 126M unique visitors per month [7] ), but the social aspects looks to work in Tumblr's favor. [1] http://venturebeat.com/2015/12/21/quora-claims-10-of-u-s-population-uses-its-service-every-month/ http://venturebeat.com/2015/12/21/quora-claims-10-of-u-s-pop... [2] http://techcrunch.com/2010/01/19/outsell-google-news/ http://techcrunch.com/2010/01/19/outsell-google-news/ [3] http://techcrunch.com/2016/02/01/gmail-now-has-more-than-1b-monthly-active-users/ http://techcrunch.com/2016/02/01/gmail-now-has-more-than-1b-... [4] http://www.theverge.com/2015/10/20/9576713/google-photos-100-million-users http://www.theverge.com/2015/10/20/9576713/google-photos-100... [5] http://www.businessinsider.com/google-finance-yahoo-finance-2012-8?IR=T http://www.businessinsider.com/google-finance-yahoo-finance-... [6] http://www.statista.com/topics/2463/tumblr/ http://www.statista.com/topics/2463/tumblr/ [7] https://managewp.com/14-surprising-statistics-about-wordpress-usage https://managewp.com/14-surprising-statistics-about-wordpres...
nommm-nommm 10y ago
Yahoo owns both Tumblr and Flickr. Alexa ranks Yahoo News the 8th most popular news source on the Internet. More popular than Fox News, BBC, and WSJ. Yahoo Mail is still used by millions.
- deleted 10y ago
  [deleted]
- hellodevnull 10y ago
  This community often seems to think that something is dead just because people don't use it in SCs or in startups, completely forgetting the average person. By their logic Windows is dead, Oracle is dying etc. the only successful companies are Google and Apple.
lmm 10y ago
They run a whole bunch of really useful services. Their personalized homepage is still great. If they would just maintain what they've got and stop swinging for the fences - turn into something like the Apache Foundation was in their early years - they'd provide a lot of value for a lot of people.

jhulla 10y ago

Yeah - this is likely a place for Buffett to park some cash with sensible returns/risk for Berkshire. It is not likely to be Buffett jumping into the tech business. My guess is that Buffett's team looked generally at the risks within Yahoo and hedged them with generous covenants on the financing. I am surprised that Gilbert didn't get Wall St financing. I would think that analysts at the big banks could structure a deal more carefully aligned with the underlying risks.

sliverstorm 10y ago

It's probably not just the sheen of his name. A very large, wealthy, & motivated investor can be an asset. I vaguely remember an old story about him; one of his companies was having trouble with their paper vendor. He found out, and promptly bought the paper vendor. Problem solved.

make3 10y ago

isn't yahoo google's failed retarded little brother? I don't see them becoming anything, anytime soon. The only point of this acquisition would be to pivot the whole thing hard or to dismantle it and spread its resources to other assets