How to destroy a monopoly giant
As an example of mistaken choices and miserable management that will be taught in the world’s financial universities in the years to come, the history of a business that has been found in the … remains and has fought to sell 25 times lower than what was once worth it.
A company that has been a monopoly in an area where growth has run and run with mad earnings and spirited rhythms has managed to reach the absolute destruction with waste, glamor, luxuries and simply investing in what it had built in the past, unable to follow developments.
It is almost certain that if the sale did not come to Yahoo’s “dead” business, in a few years we might have just talked about the padlock of the former colossus who lost the train …
The rise and fall of Yahoo! is a story that can not go unnoticed.
A story about a giant that has become a shadow of its old self … It was worth about 125 billion dollars at a time, and today it was sold … under $ 5 billion.
The idea and the rise
In the 1990s, when the Internet was still in its early stages, two graduates of the Stanford University School of Engineering, Jerry Yang and David Floyo, made something like a phone book on the Internet, full of links, which they called ” Jerry and David’s Guide to the World Wide Web ».
The idea was groundbreaking and within a year, Sequoia Capital had invested in the startup with the new name Yahoo!, which acquired the CEO Tim Kaggle, having a senior executive experience at Motorola. Yang and Friend remained as consultants, with the latter even writing Yahoo’s first search engine verb.
Yahoo! quickly became the Silk Valley Mecca.
Since then, Yahoo! has been transformed many times and before the emergence of the omnipotent Google was a giant. At that time, Yahoo was in fact a monopoly.
In the 1990s, Yahoo! was largely what Google is today.
The four big mistakes
Yahoo had a great opportunity and lost it. In the first days of Google, Yahoo! which at the time was one of the hottest names in the Internet – had repeated discussions about the company’s purchase, but never made such a move. Today, Google is worth $ 500 billion and Yahoo less than $ 5 billion.
More specifically in 1997, Yahoo! had the historic opportunity to buy Google for just $ 1 million but declined. The Larry Peugeot and Sergey Brinn, algorithm sent users to other sites after their search, at the time Yahoo wanted to keep them and so they rejected Google.
But a few years later, luck once again hit Yahoo. In 2002, Google could be bought for $5 billion, but then boss Terry Semel believed that 5 billion are many ….
Yahoo was found close to acquiring Facebook in 2006, having made Mark Zuckerberg a $ 1 billion proposal, but failed there as well.
Two years later, in 2008 Microsoft made a unique offer. It gave $ 44 billion to acquire Yahoo, but Yahoo’s boss thought it was worth more, so later, with a story that has been labeled “sad,” the company is sold for just $ 4.48 billion.
The fall and Marisa Mayer
Marisa Mayer is the woman who had been presented a few years ago as the only hope of rescuing the online company after years of failed advertising management, buyback, and downsizing.
Eventually Mayer will be in history as the latest CEO to lead Yahoo as an independent company.
Naturally, Yahoo’s course is not the result of Mayer’s only mistakes.
To the question “What went wrong under Majer’s leadership,” a former Yahoo employee replied: “Ask each CEO before it.”
But the general sense of analysts and people close to the company is that Mayer undertook an extremely difficult task, and it made it harder.
“Mayer pours resources into the wrong places, spends a lot of money, and ultimately did not have anything tangible to show for these costs,” says Jan Dowson, an analyst at Jackdaw Research.
During Mayer’s term, Yahoo acquired dozens of startups to boost the mobile team, took Tumblr for $ 1.1 billion to expand its audience, and spent huge sums of money to entice big media names like Katie Kouric and David Pog. Eventually it failed.
Indeed, Mayer seems to have made moves that eventually costed a lot. For example, all Yahoo employees received a free iPhone at a cost of over $ 9 million, and the catering that he co-operated with, was the glamorous organic Bon Appetit at a cost that seems to be half a billion for four years …
The Death of Yahoo
Yahoo! will go through her slow death and is expected to experience reincarnation through Verizon. The acquisition of Yahoo was characterized by Forbes as “the most regrettable acquisition in the history of technology.“
Indeed, Mayer was so happy to write a message to her followers on Twitter, stressing that she would remain in the Board of Yahoo and will continue to work for the new form of the company. It was then that Verizon came up with Twitter again, clarifying that “the board of the new company has not yet been decided “!
Verizon Communications has finally announced that it has finally agreed to buy Yahoo’s core online business for $ 4.48 billion, about $ 350 million less than the original price.
The deal will combine Yahoo’s services, such as search engines, email and messaging, with Verizon AOL’s promotional technology tools.