3 ms·

Google would enhance the long-term shareholder value, to be sure, but what about the short-term value? Yelp's board is probably mostly composed of top Yelp man

Google would enhance the long-term shareholder value, to be sure, but what about the short-term value? Yelp's board is probably mostly composed of top Yelp management and the VC's that put the initial money. If the initial VC's can cash out early for $200,000,000 more, why wouldn't they? Long-term, it wouldn't matter what would happen to Yelp (if it was all cash) - they'd be able to wipe their hands clean and give themselves the biggest exit. It'd kind of like selling your house. If you were moving from Seattle to SF, you would try to sell your house for the biggest price. Say the best offer comes from someone with a bad history - they want to tear down the house, build a mcMansion, whatever. If this offer was 25% higher then the next competing offer, you wouldn't care - you would just sell it, move on, and then let the neighbors deal with their new problem. Kudos to the Yelp team that cares about the 5-10 year value of the company, as opposed to the 1-3 month valuation!

pbhjpbhj 16y ago
>If this offer was 25% higher then the next competing offer, you wouldn't care - you would just sell it, move on, and then let the neighbors deal with their new problem. Love you neighbor. It's possible that someone somewhere amongst those simply trying to screw these businesses for every last cent they can get is someone who thought beyond capitalism and decided that being bought out for more was not the be-all-and-end-all but that they should hold to some other moral. Sadly, I find that unlikely though.
- unexpected 16y ago
  It's not just businesses though - at the end of the day, it reverts back to a game theory type question. Hindsight is 20/20, but I wonder how Yelp feels right now. Google/Yahoo are probably out now - who does that leave for a potential big exit? Microsoft? Amazon? Facebook? Yelp is an interesting business, but not a "change the world" type business - at least not on its own, with its current revenue model. What if nothing else pans out, the founder's stakes get further and further diluted, and they end up with nothing? Are they going to end up kicking themselves? Even Friendster had an offer from Google to be acquired... Yahoo has a notorious track record of poor acquisitions, to be sure: Flikr, Delicious, etc. I'm sure that's what Yelp was worried about - but Google hasn't done that much better either. A lot of Google's acquisitions have languished after being acquired. I wonder if there is still turmoil within Yelp management after this whole episode.
gvb 16y ago
Assuming Yahoo was aware of the top management's threat of leaving if sold to Yahoo, it quite likely would have torpedoed the Yahoo deal. Even if Yahoo wasn't aware of the threat, I would think the Yelp board would be in trouble if they sold a "furnished house" to Yelp at a 25% premium, but it turned out that the house's furnishings all disappeared before Yahoo took possession.

pbhjpbhj 16y ago

>If this offer was 25% higher then the next competing offer, you wouldn't care - you would just sell it, move on, and then let the neighbors deal with their new problem. Love you neighbor. It's possible that someone somewhere amongst those simply trying to screw these businesses for every last cent they can get is someone who thought beyond capitalism and decided that being bought out for more was not the be-all-and-end-all but that they should hold to some other moral. Sadly, I find that unlikely though.

unexpected 16y ago
It's not just businesses though - at the end of the day, it reverts back to a game theory type question. Hindsight is 20/20, but I wonder how Yelp feels right now. Google/Yahoo are probably out now - who does that leave for a potential big exit? Microsoft? Amazon? Facebook? Yelp is an interesting business, but not a "change the world" type business - at least not on its own, with its current revenue model. What if nothing else pans out, the founder's stakes get further and further diluted, and they end up with nothing? Are they going to end up kicking themselves? Even Friendster had an offer from Google to be acquired... Yahoo has a notorious track record of poor acquisitions, to be sure: Flikr, Delicious, etc. I'm sure that's what Yelp was worried about - but Google hasn't done that much better either. A lot of Google's acquisitions have languished after being acquired. I wonder if there is still turmoil within Yelp management after this whole episode.

gvb 16y ago

Assuming Yahoo was aware of the top management's threat of leaving if sold to Yahoo, it quite likely would have torpedoed the Yahoo deal. Even if Yahoo wasn't aware of the threat, I would think the Yelp board would be in trouble if they sold a "furnished house" to Yelp at a 25% premium, but it turned out that the house's furnishings all disappeared before Yahoo took possession.