How times have changed in just eight short years. Back in 2008, Microsoft, one of the world’s biggest technology companies, made an audacious $45 billion ($31 per share) bid to buy Yahoo. Microsoft was proposing to purchase all Yahoo shares at a 62% premium from their stocks closing price at that time.
Fast forward six years and Yahoo has just announced that it is selling its core business for a mere $4.8 billion. Or as we call it, chump change. Yahoo was at the forefront of technology with its advanced Yahoo Mail, Search, Finance and other services that, till this day, still attract a billion visitors a month. As far an Yahoo being an independent companies goes, well that’s over now. Verizon Communications will be buying Yahoo’s core internet operations and land holdings. The announced will be made on Monday morning.
Yahoo shareholders, after the deal goes through, will be left with about $41 billion in investments in Alibaba, Chinese e-commerce company, Yahoo Japan and a few patents here and there. The $4.8 billion valuation pales in comparision to Yahoo’s peak value of moer than $125 billion that came during the dot come boom of 2000. Yahoo’s chief executive, Marissa Mayer, is not expected to join Verizon Communicaitons, in any position.
Yahoo had turned down an opportunity to buy Google for a mere $1 million in 1997 and once again in 2002. David A. Vise explains why Yahoo refused to buy Google,
“In part, Yahoo rejected it because the firm wanted computer users to spend more time on Yahoo. The Google search engine was designed to give people fast answers to their questions by swiftly sending them to the most relevant Web site. The Yahoo directories were designed both to answer questions and to keep people on the Yahoo site, where they could shop, view ads, check their email, play games, and spend more money and time, rather than less.”
In 2006, Yahoo also turned down a great opportunity of buying Facebook for $1 billion in 2006. Google is now valued at approximately $530 billion, while Facebook is presently valued at around $350 billion.