5 ms·
To be fair, the market put such a small premium on the non-Alibaba value in Yahoo largely because they weren't confident that Yahoo wouldn't just squander it.
by super_sloth 12y ago
To be fair, the market put such a small premium on the non-Alibaba value in Yahoo largely because they weren't confident that Yahoo wouldn't just squander it.
Yahoo's purchase of Tumblr for nearly a billion dollars is a great example. That asset will likely never give Yahoo a return.
- pstuart 12y agoAre there any Yahoo acquisitions that haven't been complete disasters?
- scott_karana 12y agoFlickr and Tumblr haven't been disasters (yet) for users, at least... :)
- ceejayoz 12y agoFlickr stagnated for nearly a decade post-acquisition.
- dcole2929 12y agoit's ironic because technically Yahoo and their acquisitions are sound. Flickr is still one of the best looking photo sites around, and from what I hear from my Photography friends performs like a champ. Tumblr likewise is a good technological investment. I think the failure has been turning good technology into money, which is where a lot of companies fail. The beauty of Flickr and Tumblr are ruined as soon as you start heaping crap tons of banner ads on every page. But that said you still have to find a way to generate revenue from those investments.
- yuhong 12y agoTumblr was acquired after Marissa Mayer became CEO and one of her goals was to improve acquisitions.
- albertwang 12y agobrightroll
- rokhayakebe 12y agoWhat are the complete disasters and how did you come to the conclusion that they weren't worth the price they paid? Genuinely curious.
- nullrouted 12y agoBroadcast.com http://en.wikipedia.org/wiki/Broadcast.com http://en.wikipedia.org/wiki/Broadcast.com Made Mark Cuban some money but it never turned a profit for Yahoo and they don't have anything in that space anymore. You can look at the entire list here: http://en.wikipedia.org/wiki/List_of_mergers_and_acquisitions_by_Yahoo http://en.wikipedia.org/wiki/List_of_mergers_and_acquisition...! A couple of others that stand out: GeoCities, Zimbra (Yahoo bought it for $350 Mil, sold it to VMware for less who sold it down the road as well), etc.
- kenrikm 12y agoWell not all the acquisitions were bad.. ViaWeb ;-)
- shenoyroopesh 12y agoFlurry. Another acquisition that continues to lose money.
- rdl 12y agoOverture. Which was kind of like "PayPal buying eBay" in terms of Yahoo!'s core business, but didn't go far enough.
- gcb0 12y agooverture succeed in it made google buy much larger , i.e. more expensive when summed, competitors overseas to keep up :D
- vidoc 12y agoThe acquisition of broadcast.com for 5.7B. That's an expensive domain name but the redirect works :P
- coralreef 12y agoMostly paid in stock
- kansface 12y agoYahoo's stock is valued far less than the sum of its assets. That is quite a lack of confidence.
- dragonwriter 12y ago> Yahoo's stock is valued far less than the sum of its assets. That is quite a lack of confidence. The value of any business entity with non-zero liabilities is less than the sum of its assets. That's just finance 101.
- seanflyon 12y agoMost companies have value that would not count as "assets"
- dragonwriter 12y agoMost company have intangible assets and/or liabilities whose valuation is less-than-concrete that aren't traditionally reflected on a balance sheet except when they are given a concrete valuation as "goodwill" in the event of acquisition of the company. These assets and liabilities exist all the time, though. In the case of a publicly traded company where the market cap is substantially less than the book value -- concrete assets less concrete liabilities -- there is a judgement that these fuzzy assets and liabilities aggregate to a net liability. That's a sign of perceived distress, but not really rare. Its even less rare for a company to be valued less than its (concrete) assets -- this is fairly normal. That just means that the net positive goodwill is less than concrete liabilities.
- yabatopia 12y agoThat's because investors look at Yahoo as a holding company, with 3 main components : Alibaba, Yahoo Japan and Yahoo (USA/Rest of World). It's quite normal that the value of the holding company is (far) below the sum of its parts. There are multiple reasons for this discount: assets are less liquid, overhead costs, management risks, taxes, etc.
- 12y ago