Will Yahoo! be sold? News surfaced last week that Microsoft (MSFT) might bid. Back in 2008, Microsoft bid $31 per share to Yahoo!'s board of directors to purchase the company, a deal potentially worth $45 billion but it went south. Recent news has Microsoft close to making an offer again. Yet senior executives of the software maker say they aren’t involved in discussions. Really! There’s activity for sure and whoever might take over the company is testament to the Internet reach Yahoo! has and the very real opportunities in the mobile market space that if offers.
How three years have changed Yahoo! and the numbers speak volumes. Yahoo!’s value by September this year sunk to around $18 Billion when their CEO, Carol Bartz was abruptly ousted ‘over the phone’ by the Board. In 2008, when Jerry Yang, co-founder, was running Yahoo!, he tossed out the $45 Billion offered by Microsoft. Then Yahoo! put in Bartz (reportedly foul-mouthed, obnoxious to staff and press) and wrecked havoc including considerable turnover in senior ranks till she was turfed. Until there’s a replacement, the Board installed Chief Financial Officer Tim Morse in the top role. Some credit should be given though, as Ms. Bartz did successfully complete a 10-year internet search partnership with Microsoft in 2009. Unfortunately, the company valuation is only 40% what it was when she took the helm and the market capitalization has fizzled by $27 Billion.
Let’s go back to a possible ‘deal’. On the plus side, Yahoo! has significant breadth with a massive reach of almost 700 million unique users and its popular news and finance services generate about 78 billion page views. Another plus is Yahoo!’s operations in its Asian businesses such as Yahoo!! Japan and Alibaba, a Chinese Internet firm in which it has a 43% stake. Microsoft has, at best, a mixed track record with online businesses and could really use the expertise Yahoo! has in-house. But with the depressed stock price, there’s talk too of others circling Yahoo! including private equity firms. Alibaba's CEO expressed an interest over the weekend in acquiring Yahoo. And there’s even talk that Yahoo's co-founder Jerry Yang is working behind the scenes to engineer a buyout with private equity groups.
This acquisition is important for the mobile market space,. Smartphones are growing at a rate of 50% over last years’ numbers (worldwide) and global mobile data traffic grew 2.6-fold in 2010, nearly tripling for the third year in a row. Yahoo! can be a vital component in delivering content and access and the potential buyer has great potential in advertising revenue. Yahoo! is forecasting $3.4 billion in revenues this year alone. It’s interesting to watch this play and who will reap the rewards.
How three years have changed Yahoo! and the numbers speak volumes. Yahoo!’s value by September this year sunk to around $18 Billion when their CEO, Carol Bartz was abruptly ousted ‘over the phone’ by the Board. In 2008, when Jerry Yang, co-founder, was running Yahoo!, he tossed out the $45 Billion offered by Microsoft. Then Yahoo! put in Bartz (reportedly foul-mouthed, obnoxious to staff and press) and wrecked havoc including considerable turnover in senior ranks till she was turfed. Until there’s a replacement, the Board installed Chief Financial Officer Tim Morse in the top role. Some credit should be given though, as Ms. Bartz did successfully complete a 10-year internet search partnership with Microsoft in 2009. Unfortunately, the company valuation is only 40% what it was when she took the helm and the market capitalization has fizzled by $27 Billion.
Let’s go back to a possible ‘deal’. On the plus side, Yahoo! has significant breadth with a massive reach of almost 700 million unique users and its popular news and finance services generate about 78 billion page views. Another plus is Yahoo!’s operations in its Asian businesses such as Yahoo!! Japan and Alibaba, a Chinese Internet firm in which it has a 43% stake. Microsoft has, at best, a mixed track record with online businesses and could really use the expertise Yahoo! has in-house. But with the depressed stock price, there’s talk too of others circling Yahoo! including private equity firms. Alibaba's CEO expressed an interest over the weekend in acquiring Yahoo. And there’s even talk that Yahoo's co-founder Jerry Yang is working behind the scenes to engineer a buyout with private equity groups.
This acquisition is important for the mobile market space,. Smartphones are growing at a rate of 50% over last years’ numbers (worldwide) and global mobile data traffic grew 2.6-fold in 2010, nearly tripling for the third year in a row. Yahoo! can be a vital component in delivering content and access and the potential buyer has great potential in advertising revenue. Yahoo! is forecasting $3.4 billion in revenues this year alone. It’s interesting to watch this play and who will reap the rewards.
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