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Yahoo Bidders Can't Even Agree On What They're Buying (recode.net)
It's been a while since Yahoo has been up for sale, but the interested companies are still struggling to figure out what parts of Yahoo are worth purchasing. "Being for sale is what Yahoo does for a living now," Kara Swisher reports. "This is a pretty basic deal with everyone trying to figure out the risk and reward here of taking over a clearly failing business," said one bidder quoted in the report. "Everyone has different criteria for what matters." Yahoo essentially has three things to offer, which come with their own set of problems. From the report: (1) Its core business that includes search, advertising and media assets, all of which are in decline and getting worse.
(2) Its patent portfolio that the company thinks is worth as much as $3 billion, but others peg at $1 billion.
(3) Its real estate, which the company is pegging at about $1 billion, while others put it at a much lower value.It's also being reported that Yahoo CEO Marissa Mayer will have to leave the company, regardless of whether it gets acquired or not. Some of the potential buyers include Verizon, which according to the report, isn't interested in getting Yahoo's patents. It is offering $3B to $3.5B all-cash. Several private equity firms, who are interested in getting hold of Yahoo-owned patents and real estate, are offering Yahoo a sum of $5 billion or more. "This deal is not one in which everyone's really enthusiastic, since there is a giant question of how quickly the business is deteriorating," said another bidder. "If you win, you might lose and vice versa."
(2) Its patent portfolio that the company thinks is worth as much as $3 billion, but others peg at $1 billion.
(3) Its real estate, which the company is pegging at about $1 billion, while others put it at a much lower value.It's also being reported that Yahoo CEO Marissa Mayer will have to leave the company, regardless of whether it gets acquired or not. Some of the potential buyers include Verizon, which according to the report, isn't interested in getting Yahoo's patents. It is offering $3B to $3.5B all-cash. Several private equity firms, who are interested in getting hold of Yahoo-owned patents and real estate, are offering Yahoo a sum of $5 billion or more. "This deal is not one in which everyone's really enthusiastic, since there is a giant question of how quickly the business is deteriorating," said another bidder. "If you win, you might lose and vice versa."
Good riddance to her and her narcissistic personality disorder.
Whenever you hear about billions of dollars moving around? That's "off-shore" money that isn't legally allowed to interact with the real economy (because taxes, natch).
And that's Marissa Mayer will get at least $55,000,000 dollars for destroying all remaining shareholder value.
I love that precious little snowflake
Yahoo shareowners are probably angry they didn't accept Microsofts $44 billion bid in 2008. And Microsoft is probably very lucky Yahoo rejected the bid! That might very well have been with the end of Microsoft. This bid of Microsoft back then was to me (a lay person) obviously a full-retard crazy bid for a faltering business. This just proves how incompetence thrives even (or especially actually) at the higher ladders of management. In most companies I have been employed that did well, it seems the success was more despite of management than because of it. Most leaders, CEO's etc. are utterly incompetent, despite of the picture the media often attempts to paint of "great leaders". By the way, note how the tech press has even seemed to "glorify" the supposed value of Yahoo in even the past few years, praising it as a high tech company even though there is nothing noteworthy about the products offered. $3.5 billion is also way too much - but it is small enough the loss can be "covered up" by the acquirer down the line (hidden behind dubious "synergistic effects") so it is plausible it could sell at that price.
Wow, Yahoo must feel pretty stupid turning down that $44 billion from Microsoft now.
Of course you would lose!! It seems amazing to me that these big corporations trim wages, benefits, and fight unions. But are willing to throw billions and billions at a bad deal, and buy a failing business. Wow, what ridiculous priorities.
They're buying nothing... Nothing at all... A bunch of email addresses and a bunch of technologies that are either worthless or long ago replicated elsewhere. Yahoo isn't worth one millionth of whatever its pieces manage to earn in its dismantling. It was a worthless bit of property a decade ago, and it has only depreciated since then.
The world's burning. Moped Jesus spotted on I50. Details at 11.
But they have a woman CEO! Diversity wins again.
Sometime when you win, you really lose,
sometimes when you lose you really win,
sometimes when you win or lose you tie,
and sometimes when you tie you really win or lose.
--Rosie Perez
You're welcome.
SJW's don't eliminate discrimination. They just expropriate it for themselves.
This Yahoo!(TM) has been useless irrelevant since 1996--seriously people just put a stake through it's heart.
that I ever found to be useful, and then they shut it down to save money. The rest of their "assets" are useless. Just sell off the hardware and furniture and be done with it.
I think it is a shame that Microsoft did not buy Yahoo back in 2008.
The technical clash would have been one thing. (Would Microsoft insist they use all IIS and Windows OS for the servers? What about Exchange for handling email?)
But the cultural clash would have been something else entirely. Something we would still be talking about today if it had happened.
And yes, it would likely have destroyed Microsoft, and also not fixed any of Yahoo's actual problems.
I'll see your senator, and I'll raise you two judges.
A automagical machine that produces Silicon Valley unicorns ($1B+ valuation) that always goes up, never comes down and farts a pot of gold at every rainbow.
That 44B valuation for yahoo contained Yahoo's Alibaba stake.
Take that Elop.
>> interested companies are still struggling to figure out what parts of Yahoo are worth purchasing
When you're having a garage sale and two people want to buy the same old Risk set for $2, does it really matter whether they agree the old pieces or the old board are really the most valuable thing?
Microsoft would be able to absorb all Yahoo Mail and Yahoo Search users into Outlook and Bing circa 2008. It's a good strategy if they think the brand dominance is worth $44 billion.
Between 2011 and 2014, Yahoo had a total net (after-taxes, after-expenses) income of ~$9.75 billion. If Microsoft backed down out of it after 2014, folding Yahoo operations into Outlook and Bing, that's a raw $16 billion in profits. Yahoo took a $4.3 billion loss in 2015, cutting that back to $12 billion; but Microsoft might have folded all of Yahoo into Microsoft operations and converted their brand and business away, eliminating the source of that loss.
That gives Microsoft a $3 billion patent portfolio to sell or hold, about $20 billion of total profits, and a cost of $25 billion over 6 years or around $4.2 billion per year, in theory; their losses might be less and their profits might be greater thanks to the dominance of the Bing brand. Sheer market saturation might have moved more people to Bing and Outlook, breaking Google's dominance and flooding Microsoft with even more profits.
Note that Microsoft had $17.5 billion of net income in 2008, $23 billion in 2011, and $20 billion in 2013 and 2014. Picking up Yahoo for $44 billion wouldn't have significantly injured Microsoft if it didn't pan out, and might have paid out *huge* if it did.
I would have thrown a $44 billion bid for Yahoo in 2008 if I was Microsoft.
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Yahoo shareowners are probably angry they didn't accept Microsofts $44 billion bid in 2008.
As a Yahoo! customer during that time, Microsoft buying Yahoo! would have led to faster decline than what was seen.
And in all honesty, Yahoo! is operating like they don't *want* to have customers. I consistently get mailing list notifications on my Yahoo! mail now, sometimes having to re-enable a mailing list a few times a week. They are their own worst enemy right now; most of their issues could be resolved if they actually started caring about their customers again.
Truth is like the sun. You can shut it out for a time, but it ain't goin' away. - Elvis Presley (source: imdb.com)
Yahoo holds a 15% of Alibaba, at current market cap that alone is worth $28 billion
This is the warning for CEOs who destroy the *ability* for the techs working hard to make a company like that function. We all know that it doesn't matter how keen or gung-ho you are to make things work for a company, if you take away an employee's ability to balance their responsibilities to their lives then you are going to get poor quality, if any, innovation in a business of that size because of the resentment and exhaustion it causes.
Telecommuting, helps you restore your energies because suddenly a few hours of commuting is out of the way and you can get a few things done, and still get your work done. Not being able to balance telecommuting is the the elephant in the room for Mayer. Rather than "amplifying it's greatness" she destroyed a principle at Yahoo that would help them get there. Now the entire company is paying the price for all of the symptomatic issues of an exhausted workforce.
My ism, it's full of beliefs.
Alibaba was worth only $13 B at the time (http://www.wsj.com/articles/SB120312422017973141) so $44 B was still a gross overpay.
There will always be idiots like you using made-up numbers to justify a poor management decision and obfuscate the issue. It is generally agreed the bid was disastrous so you are clearly in the minority.
Oh and all that income - Yahoo earnings per share -$4.76 (yes minus of a share price of $36). Doesnt look like a huge cash cow to me. You just picked the few years where they were able to manipulate their non-GAAP earnings into the positive. Clearly they are paying the price now - and so would Microsoft if they had bought this crap.
As far as I remember some shareholders sued Yahoo management for rejecting Microsoft's bid! They knew the business wasn't worth near anything that much.
Yahoo's only possible value is first and foremost in the real estate and other physical assets. The patent/IP portfolio might be worth something but it is hard to say - in high likelihood a lot of it is junk patents (sadly even some of those might be valuable or at least someone might THINK it is. But consider this: How much money will the portfolio actually generate until the patents expire? Most patents sit completely unused so they are just a cost.). As for the IP in form of copyright of code, that is probably only useful for running their products (search engine, mail etc.) and have little value outside of that. As for the products, they are running at a loss and a disappearing customer base with the only mystery being why they stuck on so long and who they really are.
There are also expenses in taking it over and letting off all the staff etc.
I would put the true valuation at $500 mio max. But there is probably some unlucky company with MBA's they will advise management to buy it for $10 bio. for the "strategic" and "synergistic" effects.
The cow is dry, it's time to salvage the meat.
You are buying a piece of shit. Polished.
It wouldn't have mattered, because the Yahoo shareholders would have already cashed out, because Microsoft bought them.
She is hot.