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Verizon signals its Yahoo and AOL divisions are almost worthless
- yvoschaap2 8y agoThat has been for a long time: the equity Yahoo Inc. held in Alibaba was for a long period worth more than Yahoo Inc. itself.
- mtgx 8y agoAs I said when the Yahoo data breach was uncovered, Verizon was should've reduced the acquisition deal by billions or even scrap it altogether. Instead they only reduced it by $350 million from $4.8 billion. Dumb. Either way, I'm actually happy with this outcome, because for one Yahoo was destroyed due to its data breach and allowing the NSA to put backdoors on its servers, and second Verizon said it's getting out of the content business. That can only be a positive for all Verizon customers, because Verizon being involved in the content business only meant more and more spying on its customers' web behavior. Hopefully we'll see more such cases where the value of companies suffering major data breaches is reduced to almost nothing. Maybe that will change the industry's thinking about data security and data collection a little bit. I've also long argued that governments as well as corporations should see data collection as a liability. So that when a data breach happens and everyone's data is exposed, they should be fined into near-bankruptcy. However, if they minimize data collection and they encrypt the data they do gather in such a way that even the companies themselves can't access it (end-to-end encryption, fully homomorphic encryption, etc), then they should be immune from such fines. I figure that would swing the pendulum towards companies minimizing the reckless "all they can get" collection of users' data.
- sverige 8y agoIndeed, instead of "Medicare for all," why not "HIPAA for everything"?
- matte_black 8y agoAll you are doing by making such punishing consequences is giving hackers an actual motivation for breaching public companies. Right now if data leaks, maybe you get some emails and user data which is cool but ultimately useless beyond spam value or for identity fraud, or perhaps for hacking some other financial accounts that may be of some value, but also adds more risk. But if you know a company could be utterly destroyed with fines, you can open up a huge short position on the company and then publicize the breach somewhere and wait for the stock to drop to zero. Or maybe you’re a startup and want to eliminate some competitors. Pay off some hackers in bitcoin to attack and breach their servers and watch them go under. Better to just leave things the way they are now.
- gnode 8y agoYou could take your reasoning to physical security, and say that banks shouldn't be expected to protect customers' safe deposit boxes, because a bank robber could open a huge short position in the bank, rob them, and profit from the loss of customer trust.
- matte_black 8y agoNope. The equivalent argument is that if one branch of a bank gets robbed they should be fined to near bankruptcy, which would almost certainly cause a drop in shareholder value.
- ryanlol 8y ago>Yahoo was destroyed due to its data breach No, not really.
- paulie_a 8y agoExactly, by that point is was beating a dead horse.
- geocar 8y agoNo shit. AdapTV and Brightroll were like 90% fraud last time I looked at it. Yahoo!'s sponsored search is also.... particularly special.
- fumar 8y agoProof?
- geocar 8y agohttps://www.nbcnews.com/business/business-news/yahoo-s-ad-network-plagued-high-level-ad-fraud-sources-n492971 https://www.nbcnews.com/business/business-news/yahoo-s-ad-ne...
- dmix 8y agoLooks like Yahoo sold brightroll in 2017 and Adap.tv isn't even service anymore...all rolled into Verizon.
- aerodog 8y agoMarissa Mayer
- blastofrocks 8y agoWhy don't they pivot ? They sure will be having some awesome engineers in there
- dagw 8y agoYahoo hasn't done anything but pivot for the past several years. Pivoting in itself doesn't do anything.
- qubex 8y agoContinual pivoting has a name... it's called a death spiral.
- dandare 8y agoA startup I worked for was acquired by AOL, all the good engineers left as soon as possible. Bureaucracy, lack of any vision, slow at everything. AOL was a media company, not a software development company.
- code4tee 8y agoWhen Yahoo was Yahoo the “Yahoo” bit (everything that wasn’t the Alibaba shares) was valued as negative dollars for a bit given that the market cap of YHOO was less than the value of the Alibaba shares. So if now it’s “virtually worthless” that’s better than being worth negative dollars. (Trying to see the bright side here.) Does of course raise the question of why did Verizon pay anything for Yahoo but those are the tough questions Verizon’s executive team will need to answer for its shareholders.
- vonmoltke 8y ago> When Yahoo was Yahoo the “Yahoo” bit (everything that wasn’t the Alibaba shares) was valued as negative dollars for a bit given that the market cap of YHOO was less than the value of the Alibaba shares. That's not how it works. First, when a company's price-to-book ratio (the ratio of the company's share price to its book value per share) you can't take semi-arbitrary parts of the company's book value that add up to its market cap and declare the rest to be worth negative value. The situation arises because investors value the overall package less than someone who would like to own the assets outright. Second, static piles of money will always be discounted by the market, particularly when they are mostly illiquid (as the Alibaba stake was). If the Alibaba stake had been separated out into a publicly-traded company by itself it would have traded well below its book value, because what rational investor wants to buy into a static pile of money?
- vasco 8y ago> because what rational investor wants to buy into a static pile of money I'll happily pay you however much you let me buy of a static pile of money for under the dollar amount of the pile, as long as the difference covers transfer fees. I'm pretty sure I wouldn't be the only one either. This to say that when you state "that's not how it works", that's your analysis of the market, and you're free to rationalize how you think the market arrived at a current valuation, but other people will rationalize it differently. That's the whole reason why different investment strategies exist.
- Retric 8y ago
- AznHisoka 8y agoI miss Yahoo games. That was the only semi-engaging/social part of the site and they killed it. Dumb decision, almost as dumb as Google killing Gtalk/gchat
- indigodaddy 8y agoYeah, Yahoo Games was pretty great.
- Alex_Fragd 8y agoI remember that pictionary type game they had. I would play with a friend in the schools computer lab. when it was our turn to draw, we would share the answer with the other person, then draw the most outlandish thing. of course when my friend typed in the correct answer everyone else was like, WTF. good times
- beams_of_light 8y agoI'm really surprised by how poorly Yahoo has managed...Yahoo, but especially their movies page. I used to use movies.yahoo.com as my hub for trailers and showtimes, even in the era of top Google. Now, the first thing you see is a mishmash of entertainment news, presented in a boring vertical format. There's no prioritization of the biggest movies being released, no big horizontal banners sliding with the newest movie releases being shown off, etc. It's boring, innavigable word vomit on a white background. I can't even fathom why the decision was made to make it so boring and useless. How could this have possibly made Yahoo better?
- downandout 8y agoNot that I disagree with the sentiment here, but there’s a pretty gigantic footnote in the article that relegates it to the bargain bin of overhyped clickbait: ”That doesn't mean Oath is actually worth only $200 million in cash — Oath said it still has about $5 billion of real assets remaining.” Oath’s goodwill was dramatically overvalued, but the fact that it has $5 billion in real assets makes it difficult to describe the “almost worthless” label used in this article’s title as anything but clickbait.
- tootie 8y agoIt's not clear what those assets are. But absent revenue, it means Oath is basically just a bank with a mishmash of investments. Same way Yahoo's entire value is shares of Alibaba. It's extremely valuable even though it's not a viable business anymore.
- cft 8y agoSoon the net worth of Marissa Meyer will be more than that of Yahoo.
- ngcc_hk 8y agoTo be honest it was in the league of amazon and Microsoft. Not that bad. And could this might just be a tax avoidance move?
- sct202 8y agoThey just got a new CEO so it might be tax avoidance and also a new CEO wanting to start with a better so that he wouldn't have to take the write down later when it would be blamed totally on him.
- sheeshkebab 8y agoLooks like an end of the year tax optimization write down extravaganza at Verizon.
- marktangotango 8y agoI also believe this is the only correct answer.
- giancarlostoro 8y agoAh, I hadnt even thought about that all this time. Buy a failing top web service just to write it off at the end of the year.
- walrus01 8y agoI'm looking forward to seeing who buys the Yahoo "chicken coop" datacenters in Quincy, WA and other places when it finally goes belly up.
- konspence 8y agoContext?
- walrus01 8y agoA long time before the Verizon acquisition Yahoo spent a lot of money trying to build big google-like cloud scale datacenters in a place with cheap electricity. If Yahoo is effectively worthless, I foresee some empty space...
- tomschlick 8y agoHopefully some cheap servers will hit ebay then...
- scarface74 8y agoIs anyone else wondering how the 7th most popular website in the US is floundering financially? https://www.alexa.com/topsites/countries/US https://www.alexa.com/topsites/countries/US
- Tuna-Fish 8y agoBy being very expensive to run. In 2016, they had 8500 employees. In comparison, the 5th most popular website (reddit) has <250 and has not exactly been the greatest financial success story either. The primary business that Yahoo is in is really content production. And content production just isn't as high margin as search.
- giancarlostoro 8y agoOuch. That really sucks. They also had soooo many services its hard to keep up when you rarely go on their site to begin with. Like years ago you could watch some shows off their site. I found out through a college professor. I never bothered trying to watch anything off their site though. I dont know what the answer should of been for them but 8k employees sounds crazy. Tumblr was a decent investment but I suppose without properly putting ads on it, it really didnt return much. Yahoo had everything from an IM service, mail, hosting, groups, fantasy sports stuff, Geocities once the defacto free site host of the internet, their own web browser at one point iirc and loads more.
- sam0x17 8y agoIt's just a sign of corporate rot. Yahoo doesn't do anything nearly complicated enough to warrant that many employees. And I'd be willing to bet more than 1/3 of them are "managers". Cull the non-engineer/product/design people I say.
- deleted 8y ago[deleted]
- scarface74 8y agoI don’t see how it would be possible to have that many good engineers left at Yahoo. I would think that most of the good ones left a long time ago and they are suffering from the “Dead Sea Effect”. http://brucefwebster.com/2008/04/11/the-wetware-crisis-the-dead-sea-effect/ http://brucefwebster.com/2008/04/11/the-wetware-crisis-the-d...
- Theodores 8y agoIs Yahoo Mail worth nothing? I know that Gmail is the main email that people use for personal accounts but there are millions of people on Yahoo mail and have been for twenty years. I can't believe that is worthless.
- acdha 8y agoThe two questions I'd ask are what percentage of those millions of accounts are actively used and what their cost of providing the service is. I could easily believe that the costs of processing and storing all of that spam for people who switched to Gmail a decade or more ago are greater than the ad revenue from the percentage of users who actually login to the site.
- dragonwriter 8y agoI'm pretty sure Yahoo, before and perhaps after the Verizon acquisition, did more than one “use it or lose it” account purge, intended to sweep out zombie accounts.
- acdha 8y agoI believe you’re right but I would still be curious about the number of people who logged in enough keep their accounts alive but not enough to make appreciable ad revenue. Disk isn’t _that_ expensive but it’s not free either and Yahoo! was never as good as Google at targeting so they can’t have had the best ad rates.
- howard941 8y agoI was thinking the same about AOL. My cow-worker in the next cube still uses his aol email, as does an Aunt of mine. How to wring value out of it? is the question I suspect the VZ folks couldn't answer. Not to ignore your point. IMO having been so thoroughly pwnd by various crackers over the years and with barely an apology to its users Yahoo Mail's surprisingly worth more than a liability, but less than a slap in the face with a fish.
- crispytx 8y ago
- duxup 8y agoThese companies get scooped up by folks who have no idea what to do with them. That seems really inefficient. Not that these were great companies but you'd hope someone(s) could take a better run at things than Verizon.
- gerbilly 8y agoWorthless to who? The headline seems mean spirited. A friend of mine used to work at Yahoo in the in the news department. She said it was one of the best teams she'd ever worked in (they were supportive with a spurious but difficult legal issue she faced ) and she pushed out some really great reporting during her one year contract. It might be worthless to Verizon, but many people enjoyed working there and I know her articles got read because a few had a national impact. Of course that is just a microcosm of the overall company, but it's sad that a friendly workplace gets deemed 'worthless' when so many abusive workplaces are overvalued.
- elliekelly 8y agoGood place to work != Good investment They aren't making any money. They aren't a good investment to anyone, Verizon or otherwise.
- gerbilly 8y agoMaybe that's the problem is that we only value as a culture what is valuable to investors.
- malvosenior 8y agoThose investors were most likely paying your friend's salary. Also, don't forget the massive data breaches Yahoo! has had. They are a huge net negative on the internet.
- gerbilly 8y agoThe advertising revenue was likely paying my friend's salary. The investor's make money off of Yahoo (or lose) because they had enough money lying around to buy a stock or mutual fund.
- malvosenior 8y agoIt depends. Companies raise money to scale operations. Without the IPO and earlier venture capitalists, Yahoo! wouldn't even exist.
- icedchai 8y agoYahoo screwed up so many times. They could've been Google. They could've been Facebook. It's sad because in the 90's, they were the "go to" place. I knew so many early internet users who had their home pages set to Yahoo.
- giancarlostoro 8y agoThey could of probably have bought out MySpace at its prime even.
- icedchai 8y agoProbably! Yahoo had a lot of social networking features early on, before it was really even called that: games, chat, personals, message boards (for stocks/finance, etc.) Yahoo was so great in the 90's! It was hard finding things on the early Internet. What they were doing with directories and search seems primitive now, but it really ground breaking. I still remember the first time I discovered it. Probably late '94 (before it was called Yahoo) or '95...
- bdcravens 8y agoIt was called Yahoo in 1994, though they were still part of the stanford.edu domain at that time.
- giancarlostoro 8y agoWow, having used Yahoo since the early 2000's I didn't even know about that. Their history is quite a fascinating read altogether: https://en.wikipedia.org/wiki/History_of_Yahoo https://en.wikipedia.org/wiki/History_of_Yahoo!
- glenstein 8y ago>Yahoo had a lot of social networking features early on, before it was really even called that: games, chat, personals, message boards (for stocks/finance, etc.) Exactly. Yahoo had more organic pieces of a true social network than Google ever did. In addition to the ones you listed, there were their news properties, groups, fantasy sports, and later on, properties like Delicious, Flickr and Tumblr. They could have had something really interesting under good management (admittedly a huge caveat). They had the pieces to a more plausible facebook competitor than Google ever did, and even Google's best potential seed of a social network, Google Reader, was mismanaged in a failure of strategic vision. In any case, I'm not among those who think Yahoo was doomed. They had the pieces to become something interesting.
- throwaway5752 8y agoThis article seems incorrect. Oath is Yahoo + AOL. Goodwill (https://en.wikipedia.org/wiki/Goodwill_(accounting) https://en.wikipedia.org/wiki/Goodwill_(accounting)) is the amount you paid for an acquistion, above and beyond the fair-market book value of a company. Just per the article, AOL was $4.4B and Yahoo was $4.5B. Now, just ignoring any tuck in acquisitions that Oath has made as a unit (presumably goodwill being rolled up under it), you have $9.9B in acquisition costs with $4.8B in goodwill initially. They are just saying they overpaid by $4.6B, and it's now worth $5.3B. If any CPAs are out there would love to know if my interpretation is right.
- paulcole 8y agoReading the first sentence of the article would’ve cleared that up: > Only a year and a half after it built Oath from the assets of the communications giants Yahoo and AOL, Verizon now says they're virtually worthless.
- Bartweiss 8y agoRegardless of anything else about the brands, that sentence is certainly wrong. It pretty much just reads "this was written by a reporter without a financial background". The one thing that definitely isn't worthless here is "the assets of the communications giants Yahoo and AOL". Those are worth $5B, as noted further down in the article. Verizon has written down almost all of the goodwill value of Oath - which despite the name is not brand equity or consumer loyalty, but the collected sum of a company's non-asset value. The discussion above is about whether it's fair to describe a division as 'worthless' when its assets are still quite valuable and its operations were not so much valueless as grossly overestimated. A lede which introduces the topic while horribly misusing the term 'assets' doesn't have much bearing on that.
- deleted 8y ago[deleted]
- deckar01 8y ago> Verizon said in the filing Tuesday that it last assessed the Oath brand's goodwill at $4.8 billion. Writing off $4.6 billion of that means Verizon now values Oath — including AOL and Yahoo subsidiaries like Yahoo.com, AOL.com, the Huffington Post, MSN and TechCrunch — at just $200 million on paper. They are saying the value the brand adds to the underlying assets (goodwill) is really 4% of what they originally paid. The brand is relatively worthless.
- edm0nd 8y agoAOL will always be priceless in my opinion. It helped shape and spawn tens of thousands of IT people and programmers. Anyone from back in the days of AOL 2.5 or 3.0 that used 1IM punters, cchats, <M><, scrolling on internals, etc. will know what I mean. The internet was a wild and amazing place back then.
- jjordan 8y agoRelive the good ole days in the AOL Proggies FB group :) https://www.facebook.com/groups/297526060414740/ https://www.facebook.com/groups/297526060414740/
- irishcoffee 8y agoThe AOL I remember predates fb
- jdwithit 8y agoI very distinctly remember downloading the AOL update that added a "browser" for "the world wide web". Up til that point, AOL was pretty much a walled garden where you could only access content created by AOL or other members. It may have had some level of Usenet access? I forget. I had no idea what this web nonsense even meant, but I was extremely excited to find out. Turned out to be a pretty good idea in the end.
- _Microft 8y agoYes, it got Usenet access at one point. See https://en.wikipedia.org/wiki/Eternal_September https://en.wikipedia.org/wiki/Eternal_September
- mywittyname 8y agoI remember you could log into AOL, then open up a web browser to access the rest of the internet. Was that not always possible with AOL?
- im1983 8y agoJeez. I sure hope they will keep Yahoo Finanace running.
- kdot 8y agoHow much money has Verizon wasted trying to create revenue from outside their core competency. Every venture has been an epic failure.
- stupidbird 8y agouhh... duh I'm amazed that they haven't had massive layoffs. They're both popular enough to the point where they could turn a profit with a significant shift in how they operate.
- sct202 8y agoBe amazed no more, at noon there was an announcement that 1k jobs at Oath (Yahoo + AOL) will be cut https://www.nbcnews.com/news/amp/ncna948001 https://www.nbcnews.com/news/amp/ncna948001
- thrillgore 8y agoI'd argue with some of the decisions made with regard to Tumblr, this is self-inflicted. Has it not dawned on the Baby Bells that maybe content creation is an expensive endeavour and its maybe not worth the investment?
- kevin_thibedeau 8y agoWhat does that say about the value of Verizon management if they couldn't determine that beforehand?
- moomin 8y agoHas anyone tried to use an OATH site from the EU and tried to make any actual GDPR decisions? It's unusably bad. Now, it may well be perfectly legal to render the site completely unusable if you don't want the default (I'll let others argue that out) but... it's meant my personal use of these sites has dropped to zero. I literally go "Oh, OATH, never mind." I might not be in the majority, but it sounds like they could use all the visitors they can get.
- martin_bech 8y agoI do the exact same thing
- _nrvs 8y agoSame 100%
- riffraff 8y agothanks for saying this, I thought I was the only one.
- Reason077 8y agoIt seems like it’s designed to make it difficult or impossible to access OATH sites without consenting to tracking. GDPR test case waiting to happen, surely?
- jfk13 8y agoI can't imagine that's actually GDPR compliant. Since that appeared, I just won't waste my time trying to use their sites.
- yholio 8y agoIt's clearly an asymmetric consent system, designed to make it harder to whitdraw consent. These are forbidden explicitly under GDPR.
- cribbles 8y agoIt’s so flagrantly non-compliant that I am unsure what they stand to gain by having added it. Might as well divest from Europe entirely at that rate.
- deleted 8y ago[deleted]
- jeanlucas 8y ago[oh wow](https://i.redd.it/xmulu1f6urt11.jpg https://i.redd.it/xmulu1f6urt11.jpg)
- yamann 8y agodoes anybody here doubt that Verizon management didn't know that Yahoo was worthless before the deal? it's all about connections
- goobynight 8y agoYep. Get a few execs cross-pollinating over the years and you get this. It's surprisingly common and happens right before our eyes.
- johan_larson 8y agoWow. I hadn't realized Google is so dominant in online ads. Even Facebook is a distant second. And Amazon is barely in the running.
- fumar 8y agoDo you think having one company dominate the internet as the portal (search) and advertising (embedded in search/content) is good for competition?
- dredmorbius 8y agoWithin the past year or three, Amazon have been Google's largest ads customer. So there's that. Possibly incentive for Amazon to make itself its own best adverts option.
- agglomeration 8y agoAwesome, because Verizon is fucking worthless too. Perfect dumping ground for more derelict corporate agglomeration.
- zelias 8y agoSo, Verizon acquired the assets of a couple of failing companies, and then botched any attempt to generate synergy during the acquisition. Not surprising? Can't remember the last time Verizon launched a truly innovative initiative of any kind.
- dcole2929 8y agoIt'd be great to see some enterprise, be it another tech company or private investors, swoop in and maybe rescue a few properties since Verizon views them as worthless. With the right vision and leadership I still think some of these could be real assets.
- balozi 8y agoI agree with their assessment. That's why they should sell both of them to me for $1 Million. Hey Verizon, if you happen to read this, I will take that burden off your hands. PM me!
- iClaudiusX 8y agoThe bigger story is they're getting rid of 44,000 employees (nearly a third of their workforce), with the first 10,000 taking voluntary buyouts right now. That's after a $4.5 Billion tax cut. Rather than invest in those engineers, they're outsourcing to offshore IT. https://arstechnica.com/information-technology/2018/12/verizon-cuts-10000-jobs-and-admits-its-yahooaol-division-is-a-failure/ https://arstechnica.com/information-technology/2018/12/veriz... https://www.wsj.com/articles/verizons-severance-offer-goes-to-about-44-000-employees-1538587179?mod=article_inline https://www.wsj.com/articles/verizons-severance-offer-goes-t...
- Tsubasachan 8y agoProfit maximization is a basic tenet of capitalism. Verizon serves their shareholders not a country. The alternative is to turn Verizon into a state owned company like Huawei.
- house9-2 8y ago> Verizon serves their shareholders not a country. What about their customers? > Profit maximization is a basic tenet of capitalism. Sure, then lets eliminate tax cuts for 'Profit maximization' based corporations and increase their taxes to help the people of this country. I like the fact I live in a Democratic country, the fact that it runs on capitalism, not so much.
- el_benhameen 8y agoVerizon and others of its ilk have worked hard to convince people that cutting its taxes would help its employees and the country as a whole, not just (or not even!) its shareholders. This was obviously (and now more obviously) bullshit in pursuit of that same profit maximization, but given how they lobbied for it, I think it's entirely fair to criticize them on this basis.
- Tsubasachan 8y agoLook the American people have voted for a Republican party who approves of lobbying. Don't get angry when companies actually do it and do it well. And the tax cuts were bullshit and many economists said so but the American people voted for it overwhelmingly. Because Americans always vote for tax cuts. Verizon plays the game by the rules and they won.
- arafa 8y agoI actually quite like the Yahoo Sports iOS app, it's way better than the bloated, buggy, ad-ridden disaster that the ESPN iOS app is. I used to use Yahoo Finance like some others here also. And their RSS reader was pretty decent before. There's some non-terrible pockets of Yahoo still hanging around.
- sys_64738 8y agoAOL still has a healthy subscriber base to dialup so is at least generating revenue for Verizon. Perhaps VZ should spin off Yahoo! as a separate entity to survive on its own. What's Melissa Mayer doing these days?
- brianbreslin 8y agoCan someone explain how the accounting plays out on these write-downs? So they take a $4.5B write-down in the value of the assets, does that mean they now have a "loss" to use against their income and reducing their taxable income?
- skywhopper 8y agoWhile I agree that this was a bad investment for Verizon and clearly it's a failure in many ways, the justification for the headline is massively misleading. Writing down goodwill in and of itself is not evidence of anything. It's an accounting adjustment. The amount of goodwill on the balance sheet is just there to make things balance (thus the name) after an acquisition, and the goal is to get rid of the line item eventually. I guess it makes for an appealing lede with the big number of dollars, but it's meaningless. Focus on the real evidence of failure, not the balance sheet shenanigans.
- zw123456 8y agoThere is a reason why the EVP that engineered the deal got fired.
- Tempest1981 8y agoAnyone remember Yahoo! Music? Another market leader that is now defunct. "Yahoo Music was the number one online music site in terms of audience reach and total time spent in March 2007." https://en.m.wikipedia.org/wiki/Yahoo!_Music https://en.m.wikipedia.org/wiki/Yahoo!_Music Unlimited streaming for $9/mo: https://en.m.wikipedia.org/wiki/Yahoo!_Music_Unlimited https://en.m.wikipedia.org/wiki/Yahoo!_Music_Unlimited
- Bartweiss 8y agoWow - I had no idea Yahoo! Music was that big that recently. Sort of hard to guess how much blame anyone at Yahoo actually bears for that decline, though. I notice 2007 was also the year Apple released the iPhone and started selling DRM-free music via iTunes, which has to have been something of an outside-context problem for a music web service. In general, it looks a bit like they suffered the same fate as the earliest smartphone designers. It was a worthwhile product, but practical constraints rewarded a restricted version (Palm Pilots, wholly local music storage), and the business fell out of use before there was enough space to provide a fancier version (iPhones, Spotify) of the same offering.
- drieddust 8y ago> That doesn't mean Oath is actually worth only $200 million in cash — Oath said it still has about $5 billion of real assets remaining. On the other hand, Verizon calculated that, after taxes, the write-down would knock $4.5 billion in real money off the company's income in the fourth quarter, which ends Dec. 31. I smell financial wizardary.
- mywittyname 8y agoThe value of Yahoo is the $5B tax write-off it buys us.
- drieddust 8y agoDoesn't make sense. I don't have detailed understanding on finances but Tax writeoff should be beneficial when you have a valuable assets still in use which can be written off in book. In this case they have spend $5B only to write if off the following year. Something else is going on. I don't think these guys are so stupid.
- dredmorbius 8y agoIf part of the deal was in stock, that stock has depreciated. Stock is something a company can create. Cash is something it needs to acquire. Stock swap, write-off, devalued stock. No net cash position change. Asset-liability shift may be worth the market-cap writedown.
- ogou 8y agoMAU and DAU. Plenty of companies focus only on those two metrics for valuation. Oath(Yahoo/AOL) still has massive amounts of both. Yahoo and AOL mail form an enormous (albeit aging) captive audience. The quality doesn't matter, only the number. All the other things people are commenting on are irrelevant to Verizon. What it is writing off is the value of the content channels, Yahoo Finance, Techcrunch, etc. Yahoo is one of the last companies actually paying people full-time to produce internet content for their own channels. That content is not popular enough to sell enough ads against to meet their projections. So, they just write it off and use it as an excuse to cull full-time labor costs. It will be contracted out.
- bogomipz 8y agoSo the timeline of events is: Verizon insanely overpays for a pair of companies who are in complete decline Verizon rebrands these companies with one the worst sounding names in business - OATH Verizon declares these acquisitions worthless This expensive mistake will likely be offset by employee layoffs and new fees levied on existing customers. What a toxic company.