21 ms·

Yahoo sold to US telecoms giant Verizon

• protomyth 10y ago
  Mods: What was with all the other submissions being marked DUP?
  • slater 10y ago
    They're ... duplicates...?
    • protomyth 10y ago
      They weren't at the time, someone was marking all the early submissions then putting a link to a two day old thread. It looked like someone was picking what source would make the front page.
• cs702 10y ago
  Less than the $5.7 billion Yahoo! paid in 1999 for Mark Cuban's Broadcast.com: http://money.cnn.com/1999/04/01/deals/yahoo/ http://money.cnn.com/1999/04/01/deals/yahoo/ Times -- and fortunes -- change.
  • dchest 10y ago
    Adjusted for inflation, $8.2 billion in 2016 dollars.
    • jonknee 10y ago
      Adjusted for stock returns (since it was an all stock deal), $1.3b. And that includes the huge Alibaba stake that is most of Yahoo's value, if that deal never happened and Yahoo was just what Verizon bought the total would be ~$169m. Mark was smart and bought puts to protect his stake and then sold it so that he wasn't tied to Yahoo. In retrospect he was really smart.
      • beagle3 10y ago
        > Mark was smart and bought puts to protect his stake and then sold it so that he wasn't tied to Yahoo. In retrospect he was really smart. Also questionably legal. There's this little thing called SEC Rule 144 [0], which forbids this kind of action (attempting to preempt pump-and-dump IPOs and mergers). I have no knowledge of the specific details involved, but I find it unlikely that Cuban was not subject to Rule 144 - especially since you say "bought puts to protect his stake", which indicates he couldn't sell Yahoo shares at the time, and thus was almost surely subject to said rule. SEC enforcement was a joke (and possibly still is), but illegal actions are only ever smart in retrospect, post "statute of limitations". [0] https://www.sec.gov/investor/pubs/rule144.htm https://www.sec.gov/investor/pubs/rule144.htm
        • djhn 10y ago
          This is (afaik) a good description of his trade: http://investmentxyz.blogspot.fi/2006/05/cubans-collar-anatomy-of-famous-trade.html http://investmentxyz.blogspot.fi/2006/05/cubans-collar-anato... I'm not familiar enough with the SEC rules to add anything to your comment, other than it's the first time I hear this and it's.. interesting?
        • jonknee 10y ago
          Using options to smooth volatility is a common technique after M&A and was likely done for him by the same bankers that made the original acquisition. I am sure it was on the up and up.
          • beagle3 10y ago
            SEC enforcement was a joke for years, probably still is. A lot of people are doing this, so, yes it is a common technique, and no, it's not ok - it runs afoul of SEC Rule 144. No action or inquiry from the SEC is a bet that a lot of people are willing to take, and it pays well for most of them. So does lying to the IRS. Personally, I prefer to pay more taxes, and lose some income (I wanted to protect a 5X exit from downside using puts, and my tax/legal guy warned me against it and introduced me to 144. I ended up with a 1.1X return - I've lost 98% of the profit because the buyer's shares dropped 5 months after the purchase for a reason unrelated to the 5X exit I was a part of. Sums weren't life changing either way, in case you wonder).
  • adevine 10y ago
    True, but most of the value in Yahoo is being left in the old company the owns the interests in Alibaba and Yahoo Japan.
    • phamilton 10y ago
      Yeah. $5B is a small chunk of the current value of their $1B investment in Alibaba. Some investments work out. Others don't.
  • dogma1138 10y ago
    It's hardly a unique case, AMD is worth less now than what it paid for ATI back in the day.
    • byuu 10y ago
      That really had to be the dumbest moves in computing history. "What does the #2 CPU maker need to become #1? The #2 GPU maker, obviously!"
      • yulaow 10y ago
        Well to defend them they needed a solution to fight the incoming intel cpu with integrated gpu. They needed ATI portfolio and knowledges.
        • monocasa 10y ago
          Yeah, exactly. If they didn't have their APUs, they wouldn't have hardly anything anymore.
        • byuu 10y ago
          The integrated GPU really didn't need that kind of power, though. Anyone playing more than solitaire is going to get a discrete GPU anyway. They could have snapped up a smaller chipset maker for a tenth of the price. Instead they entered both the integrated and discrete GPU markets, when they were already a market underdog that already struggled in the CPU market. They paid way too much for ATI, and then spread themselves way too thin. I'm not just pointing out the error in hindsight, I was a critic of this deal back when it was first announced as well.
          • pcwalton 10y ago
            > Anyone playing more than solitaire is going to get a discrete GPU anyway That's not true. The PC enthusiast market is a small segment of the overall PC market, and that's not even counting mobiles. Lots of people play non-graphically-intensive games. More importantly, GPUs are hugely important for things that aren't games. Honestly, the fact that video needs hardware acceleration (which is part of the media/GPU block) means that there's a reasonable argument that games aren't even the most important practical function of a GPU.
  • sandstrom 10y ago
    Had to look it up, for curiosity: In April 1999, Yahoo! acquired the company for $5.7 billion (or over $10,000 per user) in stock. [...] The company had 570,000 users. -- Wikipedia These 570k users only listened to audio, seems like the biggest waste ever. Cuban got a bunch of (undeserved?) money and Yahoo lost the same amount. Feels like a pointless transaction.
    • tomp 10y ago
      Yahoo! didn't lose anything, only its investors did (as it paid with stock, not cash)... But then, they would have lost a lot anyways, because the whole market was overvalued.
      • ChuckMcM 10y ago
        I certainly see it differently. Investors have bought and sold Yahoo! stock all along. Had they bought it when the deal to buy Broadcast was announced and sold it 5 years later, they would have tripled their money. Are there Yahoo! investors who have lost money? Sure. That is true for every stock that is traded. Are their investors that made money? Sure, same deal. If one wanted to evaluate the performance of Yahoo! management in 1999 then one way to approach it would be to answer the question, "Given what Yahoo! knew at the time of the acquisition, what would have been a better use for that stock?" I personally can't imagine what that would have been.
        • fullshark 10y ago
          Use it for employee compensation.
    • tuna-piano 10y ago
      I'm not so sure. Here's my reasoning, but I'm just using logic, I'm really not super in-tune to this stuff. If the company knew thought its stock was 10x overvalued (Yahoo's stock did drop 90% a year or so later) then they really only sold it for $570 million. That is, if Yahoo knew its stock would be worth 1/10 of its current value in a year, buying a company with $5.7B in stock will add value to Yahoo so long as The acquired company ends up being worth >$570M. That being said, if they knew their stock was overvalued, it would be best to issue additonal shares, as $1 is worth $1 regardless. Similiar to how undervalued companies should buy back their stock.
• aceperry 10y ago
  I hope yahoo mail sticks around. I've been using it since forever, and would hate to change to gmail. Yahoo mail is kind of slow, but gets the job done, gmail is too chaotic for me. Maybe I'm old school about that, but I'm all in on yahoo mail.
  • daenney 10y ago
    > US telecoms giant Verizon Communications is to buy Yahoo's search and advertising operations for $5bn (£3.8bn), according to media reports. I don't believe that encompasses Mail.
  • mdonahoe 10y ago
    I didn't believe you that Gmail was more chaotic than Yahoo, so I signed into my never-used yahoo account. The Yahoo Mail interface is much cleaner than I remember, though I don't enjoy the purple theme, the loading times, and the persistent "Try Firefox" banner in the top right. Plus my mailbox is full of spam from Yahoo itself, like weekly emails from Yahoo Movies.
    • Grue3 10y ago
      >the persistent "Try Firefox" banner in the top right We, non-Chrome users, hate persistent "try Google Chrome" banners on every Google property too.
  • x0x0 10y ago
    yahoo mail is incredibly valuable -- it's a feeder (clicks and identity) to all of their content sites. It's really one of yahoo's gems. The new owner will probably take better care of it than yahoo did.
    • dmfdmf 10y ago
      That was my take and when Mayer took over I was hopeful she'd sink some resources into the servers and fix the performance issue. Nope. Its as bad and slow as ever, all my clients that use it complain but there is nothing I could do save moving them to gmail. This was a major misstep in my opinion as Yahoo mail is the company "face" to many users. The Yahoo home page was horrible when she took over but at least she had the sense to put an end to the zooming cars and flying coke cans & etc that marred the user experience. Unfortunately, the home page news links have deteriorated to People Magazine level of coverage which has also hurt their brand. Want to know what the Kadashians are up to, the latest Taytay breakup new? Go to Yahoo.
• anc84 10y ago
  Keep your eye on http://tracker.archiveteam.org/ http://tracker.archiveteam.org/ to contribute to archiving certain Yahoo assets for future generations in the Internet Archive.
• hkmurakami 10y ago
  >Shortly afterwards, Verizon announced it would start combining data about its mobile network subscribers - which is tied to their handsets - with the tracking information already gathered by AOL's sites. I was talking to a friend who is in the Telecom industry in Japan, and apparently this sort of arrangement is not legal there. EU is generally wary of such arrangements as well. So this is a merger whose product synergies would not have been possible in other jurisdictions. In recent years I recall advertisers being skeptical about the quality of eyeballs on Yahoo!'s platform. The pitch to the same advertisers already seems more compelling, though the premise does make me feel uneasy. And I imagine Mayer will be getting her full 9 figure severance package. So much for rewarding success and having interests aligned.
  • blahi 10y ago
    The problem with yahoo was never quality of the traffic. They have the most coveted audiences cornered. Their problem is the lack of good ad units. They have banners... That's unacceptable in 2016.
    • hughw 10y ago
      Not familiar with ad tech... what is the standard for acceptable, in 2016?
      • rahkiin 10y ago
        I think it is square patches between textual content. They are everywhere on newssites. Also, 'sponsored content' as on twitter and facebook.
        • themartorana 10y ago
          Called "native ads" in the mobile space, which are all over Yahoo!'s mobile apps (see Yahoo! Weather for a simple, relevant example), and offered to other publishers through their Yahoo! Gemini platform. So not only does Yahoo! run the currently "hot" ad unit (they also do rewarded video), they own it.
• Esau 10y ago
  "US telecoms giant Verizon Communications is to buy Yahoo's search and advertising operations" First, I was surprised to see search operations mentioned, since they farmer that out to Microsoft. Second, if this is only search and advertising, I wonder what will happen to things like Flickr and Tumblr. It should be interesting to see what is actually in the announcement.
• unchocked 10y ago
  I remember being shocked when Yahoo spurned MSFT's $44+ billion offer in 2008. Goes to show, when someone offers you 11 figures for a failing company, sell because the offers aren't going to get better.
  • randywaterhouse 10y ago
    Interesting to consider the reasons for the past valuation -- before everyone realized Alibaba was blowing up (I believe it was < $1bn of that $44bn deal). So, in 2016 dollars we're talking $5bn for their core web business vs. 50bn+ (2016 dollars) for the 2008 MSFT offer.
    • vram22 10y ago
      Why the heck do people use 'bn' for billion and 'mm' for million? I've seen VC @fredwilson use 'mm' many times on his blog (avc.com), and IIRC I read some reasoning for it, either there or elsewhere, which made some kind of sense (they said Roman numeral for 1000 is M, so for million we use MM, though not sure if that is quite right logic), but why then the inconsistency between 'mm' and 'bn'?
      • coldtea 10y ago
        Because language and notation doesn't necessarily have to be logically consistent, just consistent in use.
      • semi-extrinsic 10y ago
        http://abstrusegoose.com/389 http://abstrusegoose.com/389
      • dgacmu 10y ago
        The way to consistently use 'm' as thousand and 'mm' as million is if you assume a Latin derivation, with 'm' short for mille. https://en.wiktionary.org/wiki/mille#Latin https://en.wiktionary.org/wiki/mille#Latin ('mm' thus being 'thousand thousand', since roman numerals don't compose that way -- MM would be two thousand). That doesn't mean that that's the way it evolved, but it's a way to categorize it mentally so it makes sense. While there's no logic for it conflating with 'million' and 'mega', at least 'mm' is fairly unique, unless you measure your money by its length.
• randomname2 10y ago
  YHOO used to be valued at $112B at its peak.
  • kennywinker 10y ago
    It's turns out valuations are imaginary numbers that mean nothing? I once sold a $1 beer to a friend for $2. Let's back-of-the envelope that: 100% markup, $1 profit. If I buy and sell 1 billion beers per year, that's a profit of $1B/year. Ok, so given a 5 year return on investment, that means my beer business is valued at $5 billion. Nice! Anybody interested in investing please get in touch I'm raising a series A.
    • nickpsecurity 10y ago
      Nah, you have to have explosive growth numbers with little context implying it will continue. So, cut deals to sell it at a restaurant, then a local event, and then one stadium. Numbers in individual beers will be multiplying. Clearly it will be millions or hundreds of millions of units in a year or two. So, maybe $5 billion to buy it while it's hot?
      • kennywinker 10y ago
        From $0 in profit to $1 in profit. $1/$0 = NaN. My growth rate is so big it breaks calculators. Make the checks out to "K. Winker"
    • harmegido 10y ago
      They are definitely not imaginary, they just have probabilities baked into them. Many people traded around that valuation which is much different than your example. Valuations of public companies aren't always rational in my opinion, however they are (again in my opinion) better assessments of value than any one person's estimate. If you disagree and think you are able to make a better prediction, then by all means don't leave a reply here, just short the stock (and with leverage - use options, etc).
    • justin_vanw 10y ago
• josh-wrale 10y ago
  What is likely to happen to shareholders of YHOO?
  • harryh 10y ago
    They will receive about $5.27[1] per share of YHOO stock they hold (or perhaps an equivalent amount of verizon stock if they do the deal that way) in exchange for the portion of the business being sold. Perhaps a bit less than this if there are transaction fees or taxes that must be paid. They will then continue to hold their Yahoo shares which will represent their holdings in Alibaba and Yahoo Japan as well as Yahoo's patent portfolio. 1. $5B / 948.25M outstanding shares ~= $5.27 per share.
    • kennywinker 10y ago
      Wait?! is that really how this works? What if people want to keep owning the online part of the business? Are they hooped? Seems like you could really royally screw shareholders like that (i.e. sell all the good parts and leave shareholders holding the bad parts). Their share price is about 39 USD right now, that means they sold off a huge chunk of the biz for 13% (5.27/39.38 = 0.1338) of the stock's current valuation, right? Forgive my incredulity, I genuinely didn't know how this kind of thing worked.
      • harryh 10y ago
        Yes, that's how it works. When you sell part of a business, the owners of the business (the stockholders) receive their share of the proceeds. Management (the CEO and other senior leaders) is hired by the stockholders to negotiate these sorts of deals (among other things). The stockholders are always free to fire management for poor performance if they don't like what management is doing. You are correct to note that Yahoo's actual business represents only a small portion of the value of the company at this point. The majority of the value of the company is Yahoo's holdings in Alibaba and Yahoo Japan (a similarly named but completely separate enterprise). Frankly, I'm a bit surprised that they managed to get $5B for their core business. I think YHOO shareholders are getting a pretty good deal here.
• bogomipz 10y ago
  "The US telecoms giant is expected to merge Yahoo with AOL, to create a digital group capable of taking on the likes of Google and Facebook." Can someone explain how combining two "past their prime" entities like Yahoo and AOL, with the Verizon telecom bureaucracy is going to produce anything "capable of taking on the likes of Google and Facebook"? Telecom companies have a pretty horrible culture. It is not one of innovation or agility. They are bloated bureaucracies based on tenure and not merit. I speak from experience. To give one small example I have have been on conference bridges where Verizon project managers fell asleep and began snoring. I have many more of such anecdotes with these folks. All similarly illustrative of the culture.
  • ptio 10y ago
    Note that Verizon has a division - Product Innovation and New Business - that is run separate from the telco business that you are mentioning. In recent years Verizon has acquired technology companies EdgeCast Networks (CDN) and upLynk (Video Streaming) which form the core of Verizon's Digital Media Services [1]. Combining these assets with AOL (AdTech) and Yahoo (if the deal happens) gives Verizon an end-to-end platform for the creation, delivery and monetization of content (with focus on video) in the Internet. Disclosure: I work at EdgeCast and we operate as a technology company, hate bureaucracy and try very hard to innovate and stay agile. [1] https://www.verizondigitalmedia.com/about/ https://www.verizondigitalmedia.com/about/
    • shostack 10y ago
      Yeah, this is all about digital media. Cross device tracking (see aol deal) will be helped by this purchase and tying it in for a video platform with those ridiculously high video CPMs seems to be what they are going for.
    • tootie 10y ago
      Does any of that give it customers?
      • ptio 10y ago
• dghughes 10y ago
  The oil trader folks are going to be miffed, did Yahoo! Chat get axed in the deal? https://news.ycombinator.com/item?id=11826186 https://news.ycombinator.com/item?id=11826186
• smegel 10y ago
  This sounds a lot like News Corp's purchase of MySpace back in 2005.
• kmfrk 10y ago
  While Flickr has decent export tools (you just get your photos without tags, descriptions - literally anything else), Tumblr's have always been non-existent aside from an unofficial, macOS-only tool by Marco whose download link (https://marco.org/2009/12/10/the-tumblr-backup-app-is-ready-for-its-first-beta https://marco.org/2009/12/10/the-tumblr-backup-app-is-ready-...) no longer works. Anyone recommend a Tumblr export tool? The best, as far as I can tell, is jekyll-import (http://import.jekyllrb.com/docs/tumblr/ http://import.jekyllrb.com/docs/tumblr/), but I'm running into errors and getting weird results.
  • detaro 10y ago
    At least they also have an API, more than I expected: https://www.tumblr.com/docs/en/api/v2 https://www.tumblr.com/docs/en/api/v2
  • davidgerard 10y ago
    Wordpress's Tumblr importer reputedly works pretty well. YMMV and test first, of course.
• STRML 10y ago
  So this means Mozilla's insanely bad clause (for Yahoo) [1] kicks in? 1. http://www.recode.net/2016/7/7/12116296/marissa-mayer-deal-mozilla-yahoo-payment http://www.recode.net/2016/7/7/12116296/marissa-mayer-deal-m...
  • rch 10y ago
    I'd bet that Mozilla continues to work with Yahoo/Verizon.
    • dao- 10y ago
      It will be interesting to see what the deal will mean for the privacy policy of Yahoo search, and whether that will be acceptable for Mozilla.
      • intopieces 10y ago
        I'll do more research on my own, but for the benefit of others reading, would you elaborate on this? Yahoo works with Duck Duck Go, so their privacy policy was good enough for them, it would seem.
        • dredmorbius 10y ago
          Factually true comment being downvoted (as I write this). DDG is itself a privacy proxy for search. Yahoo's privacy policy doesn't much matter if DDG are proxying (and anonymising) search requests. The substance of search results would matter. (Incidentally, since the switch, and I believe DDG were using Bing principally earlier, quality seems down somewhat.)
    • rblatz 10y ago
      Or they could switch back to google or bing and grab nearly an extra billion dollars between now and 2019. Seems like a no brainier to Mozilla.
      • 10y ago
• andy_ppp 10y ago
  What the hell has Marissa Mayer been paid for? Everything about this smells like Yahoo! is being run by idiot MBAs with some spreadsheets somewhere totally misunderstanding that technology can empower people to do fantastic things including those working within Yahoo! - instead it's been hamstrung by each property not being held accountable to it's competitors effectively. I would have started competitors (startups) internally for all of Yahoo!'s key products (buy Y.com and test them under that) and told the current product owners if their products were not better faster than these startups could build them they'd be replaced. The decision to sell search because they were not able to match the investment Google and Microsoft were putting in is another example; if you can't beat someone financially you need to be better than them. To have just given up based on "only" having a few billion to invest is absurd.
  • coldtea 10y ago
    >I would have started competitors (startups) internally for all of Yahoo!'s key products (buy Y.com and test them under that) and told the current product owners if their products were not better faster than these startups could build them they'd be replaced. If only those in charge of Yahoo and other failing companies knew of such a cunning strategy... /s
    • andy_ppp 10y ago
      You make it sound as if: a) startups aren't better at building websites than big businesses b) Yahoo! management came up with something better...
      • coldtea 10y ago
        >a) startups aren't better at building websites than big businesses Who said they are? That's a huge "citation needed". >b) Yahoo! management came up with something better... They did come up with $5 billion dollars (plus other assets of huge value not included in the buy) -- as opposed to a hypothetical scenario which could have just as easily exhausted their resources, alienated their employees, and killed their current value for not much to show for.
• tehwebguy 10y ago
  Verizon shouldn't be allowed to own any web properties. They inject a unique subscriber identifier into your HTTP requests unless you turn it off. http://www.verizonwireless.com/support/unique-identifier-header-faqs/ http://www.verizonwireless.com/support/unique-identifier-hea...
  • otoburb 10y ago
    Adoption of HTTPS helps somewhat to counter this, but note that advertisers and content sites are also complicit. Carriers wouldn't have injected such headers without demand from content partners and other run-of-the-mill sites. Vilifying carriers only attacks half the problem.
    • themartorana 10y ago
      "...run-of-the-mill sites." Highly doubtful. Someone running ads on their site doesn't make them suddenly complicit and knowledgeable about the creepiest corners of ad-tech. This is _exactly_ why knowledgeable regulators should make this illegal - this is a situation where the people on both ends are unaware of an explicit MITM attack happening between them.
  • unexistance 10y ago
    I wonder what's Mozilla's reaction to this, if they haven't done so before
    • allendoerfer 10y ago
      Let's Encrypt is Mozilla's reaction.
      • unexistance 10y ago
        I'm not the most versed in encryption & stuff, so does Let's Encrypt prevents / subvert Verizon's HTTP modification? EDIT: ah it's supercookie[1] and apparently a full protection is "Only a VPN or Tor" [1] https://www.eff.org/deeplinks/2014/11/verizon-x-uidh https://www.eff.org/deeplinks/2014/11/verizon-x-uidh
• forgotpwtomain 10y ago
  So less than 1/5 of a linkedin. Is Yahoo's core business really that bad?
  • iends 10y ago
    What is Yahoo's core business these days?
    • fullshark 10y ago
      Sounds like the core business is actually "Owner of Alibaba stock".
  • nikdaheratik 10y ago
    It's search and ads, which may or may not be their "core" as they've got a number of other properties (mail, tumblr, flickr, media). Not to mention that their entire shareprice is basically propped up by the value of their Alibaba investment.
    • forgotpwtomain 10y ago
      I was under the impression their other properties are included (mail, tumblr, flickr), and only patents and Alibaba holdings are excluded -- is that not the case?
  • bogomipz 10y ago
    You could easily invert that sentiment and ask "Is Linkedin's core business really that good?"
• SCAQTony 10y ago
  ST — that is so going to mess up my AT&T email with Yahoo. Both my AT&T account and Yahoo email are intertwined.
  • orionblastar 10y ago
    Me too and my entire family has SBC/ATT email accounts. Will it stay like the Rocketmail accounts did, or will they turn off service for legacy email to save money?
• TheMagicHorsey 10y ago
  I did a little work as a developer for Verizon's ecosystem back in 2007. Let me just say, from what I could see, they were a huge, bureaucratic company without a single redeeming cultural trait. The managers seemed like a bunch of frat boys who had been raised up into positions of authority through some inscrutable lottery, and none of them seemed to possess an iota of analytical capability or human management talent. I left that position and later worked for a bunch of tech startups and larger companies that, while not perfect, at least had enough good people in them to redeem my view on the human race. I cannot imagine why anyone would actually work as a mid-level worker in Verizon unless you had absolutely no other options in life.
  • SilasX 10y ago
    Could you elaborate on what barriers and mismanagement you experienced?
  • function_seven 10y ago
    Out of curiosity, which Verizon did you work for? The former MCI/Worldcom unit ("VZ Business"), the GTE/Bell Atlantic one (Landline, FiOS, etc.), or Verizon Wireless? As far as I know, that company has remained fairly fractured, and operated as if they were three different companies.
    • billskills 10y ago
      vzw actually is a different company, which is partly owned by vz. Fba/fgte are practically separate companies too. I worked for fba (former bell Atlantic) for years and can attest, it's no place for capable doers. It's unbelievable how many layers of dysfunctional middle management are in there, supported only by the fact that vz owns so much legacy infrastructure.
      • function_seven 10y ago
        Who owns the rest of it? I know Vodafone used to, but VZ bought their share out a couple years ago. Totally agreed on BA/GTE. I used to contract on the GTE side of the house, and I saw how little it mattered whether you were good or bad at your job. All reports I hear from the new Frontier sound like it's even worse now.
• orionblastar 10y ago
  Basically everything Yahoo tried to do basically failed to earn income, and Google came along and did those things better. Verizon can get more users from Yahoo and merge them with their AOL users. No doubt this bigger user base can be sold advertising to earn more money. Firefox stopped supporting Google searches and switched me to Yahoo, will this Yahoo change no longer support Mozilla and be taken off the list?
  • bogomipz 10y ago
    Who are the AOL users? Are these folks in rural areas out of the reach of broadband? I've heard that there are still dial up users. This however would be odd with Verizon business plans as they have been divesting themselves of copper plant.
    • sethammons 10y ago
      I know two people who are now on Verizon Fios and still start up their internet by going to AOL.com... They are about as far from a technical user as you can get.
• shmerl 10y ago
  Yeah, they have billions to spend on buying companies like Yahoo, but they can't upgrade all their rotting copper to fiber optics. That's Verizon for you.
  • ljk 10y ago
    profit first
  • megablast 10y ago
    Why would they? Until people start dropping them, what is the point?
    • theandrewbailey 10y ago
      Cable companies. DOCSIS 3 makes DSL look like dial-up. But there's evidence that Verizon made deals with cable companies to bundle wireless services, so Verizon could keep caring less about rotting infrastructure.
  • rayiner 10y ago
    Any place that doesn't already have fiber within Verizon's footprint probably can't accommodate it profitably. The margins on the places that do already have fiber are already thin. No business wants to invest in new infrastructure that isn't going to make it any money. It's not like anybody else is chomping at the bit to build fiber in those places.
    • shmerl 10y ago
      It can accommodate it profitably. But any such undertaking is a long term investment, and Verizon doesn't operate in such categories. They want to rip profits faster. Also, they have internal conflict of interests. I.e. their execs are all about wireless, and simply don't care about landline business. Splitting it in two could actually help, since then they'll care about improving. > It's not like anybody else is chomping at the bit to build fiber in those places. Verizon stopped building out fiber everywhere. Only when they have a contract, they do it (very reluctantly). Some areas are indeed less profitable because of population density and other such factors. But others are not.
• discardorama 10y ago
  If you're a current $YHOO shareholder, what does this deal mean for you?
• ubersync 10y ago
  Why isn't this mentioned/discussed anywhere. In 2008 Microsoft offered $45 Billion to acquire Yahoo. Then Yahoo CEO Jerry Yang rejected the offer, saying that the bid "substantially undervalues Yahoo." Microsoft raised the bid to 50 Billion, and it was yet again rejected. After that MS withdrew its bid. 8 years later, at 10% the original offer!
  • vijayp 10y ago
    Well, YHOO's total market cap is now about $37.36B, so it's not a complete travesty. (MSFT would have gotten the Alibaba investment with the $45B offer)
    • dpark 10y ago
      Eh, it's a pretty complete travesty. 8 years later the stock is still almost 20% below the $45B offer price, which was by the way a 60% premium over the market cap at the time. I still have trouble wrapping my head around why Microsoft even made the offer, but I have even more trouble understanding why Yahoo rejected it.
      • ethbro 10y ago
        MS: Yahoo says they're worth way more than we can figure out. They must know something we don't. Offer them a premium! Yahoo: MS offered us way more than we can figure out we're worth. They must know something we don't. Reject the offer and we'll monetize it ourselves!
      • dangrossman 10y ago
        In those intervening 8 years, Yahoo sold a big chunk of its BABA stock back to the company. If they kept the number of shares they had at the time Microsoft made the offer, that asset alone would be worth $48B today. If you add in the Yahoo! Japan holdings, the company would be worth at least $56B, even if the core Yahoo! business were worth nothing. It wouldn't have been a bad buy for Microsoft.
        • 10y ago
• cocktailpeanuts 10y ago
  To the guys on this thread who talk like they're some mini-pundits who know it all saying this is what Yahoo gets for walking away from larger valuation offers from a decade ago: No one thinks you're intelligent for pointing out something years after the fact. Tech companies come and go, and I would bet that a lot of the hottest tech companies right now will meet the end just like Yahoo did in a decade (or less). Imagine if Google becomes irrelevant in 10 years, and end up selling itself to whichever hottest tech company that will be around then. Will you say "Told ya! Google should have sold to Yahoo when Yahoo was going to acquire them for $3 billion!"
  • fma 10y ago
    It's hard to determine when a company is at peak value. Everyone here thinks it's easy - in which case they should spend their lives as short traders, selling the stock of every company that is at its peak, rather than working on their own startups which will see the same success as Yahoo.
  • manigandham 10y ago
    I think most of the comments were just pointing out how much and how fast fortunes can change, but yes, the only right way to judge a decision is within the context in which it was made. Were they the right choices given all the information those people had back then? It seems that they were.
    • cocktailpeanuts 10y ago
      It's arrogant to think one can predict any single thing in the world, no matter how successful you are. You could say the same thing ("Given all the information those people have back then, the best decision would have been to sell") about Apple right before Steve Jobs came back and turned it around. In fact here's what Michael Dell famously said: ("What would I do? I'd shut it down and give the money back to the shareholders")
  • subsection1h 10y ago
    Are you seriously suggesting that when Microsoft made its final offer in 2008, Yahoo was one of "the hottest tech companies"?
• fractal618 10y ago
  How does this effect DuckDuckGo who just partnered with Yahoo?? Does Verizon share the same values as duckduckgo?
• doppp 10y ago
  Can someone change the title to include the fact that this purchase is for the search and advertising operations part of Yahoo? Everyone here thinks it's for the entirety of Yahoo. It's like they didn't bother to read the article.
  • gaur 10y ago
    Maybe someone could remove those 'distracting, unnecessary quotation marks' as well. I think the BBC somehow thinks they're being ultraprecise by putting quotation marks around certain words, but it's just obnoxious.
    • Doctor_Fegg 10y ago
      It's just to indicate reported speech: "this isn't confirmed fact, it's something we've been told". Absolutely standard journalistic practice.
      • gaur 10y ago
        At one point, the headline was changed to read "Syrian migrant 'behind German blast'". But at that point, the fact that there was a German blast was widely known; the unconfirmed portion was that a Syrian migrant was behind it. So if anything, the headline should have been written "'Syrian migrant' behind German blast". But the BBC didn't do that, because all indications are that BBC journalists pepper their headlines randomly with quotation marks. Randomly peppering headlines with quotation marks absolutely is not standard practice. Most American newspapers don't do it.
        • Doctor_Fegg 10y ago
          Ok, absolutely standard British journalistic practice then, where the BBC (and I) come from.
  • Doctor_Fegg 10y ago
    I'm not yet convinced that isn't a case of inaccurate precis by the BBC. Other sites are reporting it's all Yahoo's tech/content (i.e. not China/Japan investments).
• jjawssd 10y ago
  5 billion dollars down the drain! Yahoo has excellent negotiators I must say!
• xorcist 10y ago
  It used to be said that Yahoo is where startups go to die. With AOL and Yahoo, is Verizon now where IT companies go to die?
• chollida1 10y ago
  Yahoo got all cash, which is nice as it gives them more flexibility, the last thing they'd want after the Alibaba spin off fiasco is to have to try and sell 4.83 Billion in Verizon stock. Bloomberg just put up a head line saying that Yahoo will return all the cash, minus Operating Costs to the share holders. If anyone has any guess as to how much "operating costs" will be, please email:) So I guess queue Alibaba and SoftBank now to come in and divvy up the rest of the company? From Matt Levine: > "Marissa Mayer, Yahoo’s chief executive, is not expected to join Verizon, but she is due to receive a severance payout worth about $57 million," bringing her total compensation for about four years of work at Yahoo to $218 million. Wow! So I guess the now decade old valley trick off spending a "few" years at google to start your career and leveraging the google name to get another job really is the way to go:)
  • Doctor_Fegg 10y ago
    I find it hard to parse "not expected to join Verizon" against Mayer's explicit statement that "For me personally, I’m planning to stay. I love Yahoo, and I believe in all of you. It’s important to me to see Yahoo into its next chapter": http://marissamayr.tumblr.com/post/147941613134/verizon-to-acquire-yahoos-operating-business http://marissamayr.tumblr.com/post/147941613134/verizon-to-a...
    • shortformblog 10y ago
      She can "plan to stay" all she wants. If she's forced out, then the best-laid plans are for naught.
      • 086421357909764 10y ago
        Unless there's still a Yahoo (with the patents, Alibaba stake, and whatever else is left over), which in that case she could technically stay. I'd imagine most of that is going onto the block too.
        • Doctor_Fegg 10y ago
• rekshaw 10y ago
  can someone explain why yahoo is worth a penny?
  • Unkechaug 10y ago
    Huge user base
  • vthallam 10y ago
    5th most visited web property in the world(source : Similarweb). Mail, Flickr, Tumblr, Finance, Sports , Fantasy sports still used by a lot of users. I think it's a pretty sweet deal for verizon. you don't get a age old web property which everyone know off for this money.
  • karma_vaccum123 10y ago
    Trailing-edge users. Trailing-edge users are those people we might otherwise make fun of, but they don't run adblockers and they don't constantly question the services they use. These people have used Yahoo Mail for a decade and will continue to for the rest of their lives.
  • deleted 10y ago
    [deleted]
• Grue3 10y ago
  That seems incredibly cheap, when stuff like LinkedIn, Snapchat, Twitter and so on having bigger valuations, despite being just as unprofitable.
  • mason55 10y ago
    One of the keys to having a valuation that's higher than your discounted cash flow is whether or not people think you can grow. Twitter, LinkedIn and Snapchat are all growth-stage companies so there is less relation between their valuation and the sum of their assets. Yahoo! is much closer to a mature company so their valuation is better determined by a sum of assets minus liabilities. With LinkedIn you had an obvious path to continue growing as well as a pretty obvious path to profitability whenever they decided to stop growing. Snapchat actually has pretty big growth prospects and has shown that they can monetize very well, so they can command a much higher multiple of their current earnings. Twitter's market cap is just over 2x what Yahoo! sold for, so it's not like people think they are THAT much more valuable, and their stock has taken quite a beating over the last year because they're showing that they don't have a path to growth.
• HoopleHead 10y ago
  I misread that on my phone's tiny screen as a "$4,88" deal. Even then I thought it was a lot to pay for... er... whatever it is that Yahoo does these days.
• joering2 10y ago
  Shouldn't it be banned? Like car factory owning dealerships? Or Movie Theaters owning Hollywood Studios??
  • briandh 10y ago
    > Or Movie Theaters owning Hollywood Studios?? Wanda Group, majority owner of AMC Theatres, also owns Legendary Entertainment. And AMC Theatres and Regal Entertainment Group co-own Open Road Films. Stepping back in time, infamous low-budget studio Cannon Films owned hundreds of theaters. > Like car factory owning dealerships? Plenty of folks think that would be a good thing, e.g., [1] [2] [1] https://www.justice.gov/atr/economic-effects-state-bans-direct-manufacturer-sales-car-buyers https://www.justice.gov/atr/economic-effects-state-bans-dire... [2] https://www.ftc.gov/news-events/blogs/competition-matters/2015/05/direct-consumer-auto-sales-its-not-just-about-tesla https://www.ftc.gov/news-events/blogs/competition-matters/20...
    • pacofvf 10y ago
      In my country, Car makers own dealerships, well actually only a small number of them, most Dealerships are franchises, so we have a mixed model that works pretty great for all involved. New makers that arrive to my country expand with their own dealerships, and after they gain traction they start to sell franchises, when well stablished car makers want to expand to new markets they usually do it with their own dealerships too.
• bitmapbrother 10y ago
  Note: this acquisition does not include their $30+ Billion USD worth of shares in Alibaba and their stake in Yahoo Japan which is about $12 Billion USD.
  • TylerE 10y ago
    What's the deal with that? How is Yahoo Japan worse $7B more than Yahoo Rest-of-World?
    • phamilton 10y ago
      Yahoo Japan is an entirely separate company. It's actually an e-commerce platform closer to Amazon than Yahoo proper. Yahoo just has an investment and a cobranding agreement. Otherwise it's entirely separate.
• pasbesoin 10y ago
  Off-the-cuff sentiment: Axis of... something. As a Verizon (now, specifically Wireless) customer, I've watched things go from "worth the price" to "what am I paying for?". And Yahoo. Once proud, pioneering Yahoo. And the remains of AOL are in the mix, as well? I mostly feel this is somehow primarily going to shovel more crap at me.
• simulate 10y ago
  Yahoo retains a market cap of $36 billion. The reason Verizon paid only $5 billion is that Yahoo Japan and Alibaba are not part of the deal. > Yahoo owns about 35 percent of Yahoo Japan and 15 percent of Alibaba, two overseas companies that have long dwarfed Yahoo in size.
• veeragoni 10y ago
  2 guys who spent 20 years at Yahoo, started WhatsApp and sold itself to Facebook for $19B. and this huge company sold for 1/4th of that price. Management vs. Product Visionaries.
  • Klinky 10y ago
    How much revenue/profit does Yahoo generate? How much does WhatsApp? Facebook paid handsomely for a lot of hype and to gamble at poaching users. The Yahoo deal seems way more down to Earth, compared to an astronomical offer by a company with cash to burn and a desperate desire to keep growth going up.
    • cdmckay 10y ago
      Facebook buying WhatsApp could also be seen as a defensive purchase (i.e. prevent Google or MS from buying up the users).
      • mywittyname 10y ago
        Facebook realizes that it's smarter to be a communication company rather than a communication platform. Brand management is a key to P&G's success, and Facebook is smart to emulate this in the tech. sector.
    • veeragoni 10y ago
      why do you think WhatsApp is not that much worth it?! I think its probably worth more. all the text/video data FB uses for its Machine Learning to drive next generation of AI. its almost equalant to FB itself. that many messages, calls goes on it every day using its user base. I think its worth it (but not many people realize it. but FB sure knows what it can do with it)
• harshreality 10y ago
  I'm curious how this will play out for AT&T internet customers, given that their email is currently hosted by Yahoo. Is Verizon going to host their competitor's customers' email?
  • arrty88 10y ago
    lol no issue
  • gcb0 10y ago
    if att has a contract with yahoo and yahoo doesn't file for bankruptcy, it will have to continue to provide support or pay the contract cancellation. ... or, now it being Verizon, they will just drip one email per day into the inbox and say that they only advertised up to 100% of email, but that the contract only really guarantees 0.01% of the advertised speed.
• mirkules 10y ago
  Every time I hear about Yahoo these days, I am reminded of the movie Frequency. At the end of the movie, the protagonist is driving a fancy mercedes with "YAHOO" as the license plate, implying investments in Yahoo made him rich. How ironic that since the movie came out, Yahoo started its decline. http://www.rexblog.com/2012/05/13/47671 http://www.rexblog.com/2012/05/13/47671
• empath75 10y ago
  I wonder if Verizon worked out a deal with the mozilla foundation over the search bar exit clause? That's basically a billion dollar pay out over 3 years if Mozilla decides to trigger it.
• Ping938 10y ago
  Here is math for people wondering about price of Yahoo: Y! market cap is $36.38b. Have in mind that Y! is selling only its core biz so we would have to subtract values of Y! shares in Alibaba and Y!Japan, which are worth $33.74b and $8.56b respectively. However thats pre-tax and Y! could not get that money for them. There for adjusted values (-38% tax)are $21b and $5.4b again respectively. There are also cash & marketable securities worth $6.8b and convertible debt of $1.4b. So final math looks like this: $36.38b-$21b-$5.4b-$6.38b-(-$1.4b)=$5b
  • profeta 10y ago
    why do people keep bringing up the alibaba and other assets when discussing the market cap? this is like buying someone body shop, looking at the body shop revenue, and then subtracting the price of the current owner paid-for porsche.
    • mywittyname 10y ago
      Because Yahoo owns $30B+ worth of Alibaba stock. To use your analogy, it's like buying a body shop, but subtracting the $10,000,000 in real estate they own because it's not included in the sale.
  • martinza 10y ago
    Spot on. Only thing missed was potential price of the patents (which arguably that price will pay for core sale taxes). Only real bet on yahoo stock right now is whether the board can avoid some of those taxes on an alibaba or yahoo Japan sale.
• jlgaddis 10y ago
  A fair amount of FreeBSD's infrastructure in hosted in Yahoo!'s datacenter in Santa Clara. I'm curious how this will affect that relationship, if at all. It's not like Yahoo! is going to stop using FreeBSD overnight or anything but Verizon may decide they don't want third-party infrastructure in "their" datacenter.
• palmyra 10y ago
  We had to deal with Yahoo Mail for the last 6 month since Yahoo marks our emails are spam. Guys, I wish this upon no one...these guys will keep on closing our tickets (6 so far), keeps ask for same information over and over again...just in order to not fix the issue. we are a small startup and probably not important enough for Yahoo to care about, its been literally a disaster for us... there is no way to escalate or contact a manager, Yahoo team will keep on ignoring our request to not treat our emails as spam!