Yahoo - is One of the pioneer of
Internet during Internet era of 1995 onwards which acted as driving force of
innovation. The revolutionary email and chat solution from Yahoo attracted
millions of active users on daily basis and their equity price skyrocketed
during Internet bubble. The higher price point enabled Yahoo to acquire
multiple to mid range companies through Share swap mechanism in order to grow
their business. The Internet bubble burst during 2001-2003 and loose coupled
integration of acquired organization by Yahoo landed yahoo in a situation where
they failed to monetize the properties.
The entry of Google by 2006 - 2007 in
big way also attracted many organization towards Google for search engine due
to their fast and clean business model whereas Yahoo struggled to maintain
their falling equity price in flagging revenue with near to zero growth.
This led Yahoo to fire multiple
CEO's and landed in paying Millions of $ in Golden parachute package and every CEO tried two things;
Acquiring new companies and taking huge charges for firing thousand of
resources with an commitment to stakeholders that they will be on the path of
growth soon. Unfortunately nothing happened. Most interesting in each and every
investor conference call, they touched Alibaba and Yahoo Japan operation which
is the Jewel in Yahoo Crown to deviate the shareholders. During Alibaba IPO,
Yahoo made handsome capital gain and distributed it among shareholders to keep
them happy rather than introspecting about their product line and subsequently
investing in Research and Development for the betterment of Future product
roadmap. They acquired Tumblr which is a blogging site with an intention to
attract more users and paid $1.1 Bn but it seems that they will close that too
in next few years.
Most interesting when Microsoft
made an acquisition offer, they felt that the offer is undervalued and rejected
the offer and I am sure that all must be regretting today for shooting down the
offer. In my point of view, Yahoo should get out of the Confidence factor that
they have multi billion $ cash hoard in the form of equity in Yahoo Japan and
Alibaba and focus on their product line in serious manner. As they are open for
sale but what is the use of being tagged as looser in Technology world when
they were the pioneer of the segment. Cheer up Yahoo team and come up with
revolutionary product line.
