Yahoo! This once-big Internet giant is now bidding farewell to its most brilliant era by selling core assets. CNSPHOTO offers
Compilation year
As the first destination for many people to log on to the website for the first time, Yahoo has been in the limelight in the era of the rise of the Internet, and its total valuation was as high as $125 billion. However, the good times are not always there. As the largest telecom operator Verizon in the United States purchases Yahoo’s core search business and real estate business news, Yahoo’s era as an operating company is coming to an end.
From the founding of Yahoo in 1994, Yahoo announced that it will sell its core business in March 2016. Yahoo, which has only passed 22 years, has reached its next year. Yahoo! This once-big Internet giant is now bidding farewell to its most brilliant era by selling core assets.
Deep in the mire for several years
After years of painful struggles in the quagmire, Yahoo has no choice but to sell its core assets.
On July 18, Yahoo announced its 2016 second quarter earnings report. The financial report showed that its second-quarter loss was $439.9 million, and the loss per share was 46 cents. After deducting the commission paid to network traffic partners, the second-quarter revenue fell 19% year-on-year. The earnings report not only set the worst record for Yahoo in the past 10 years, but also became the last financial report of Yahoo as an independent operating entity.
After a five-month bid, Verizon finally pocketed the core assets of Yahoo's veteran Internet portal for $4.83 billion.
Bloomberg reported that according to the agreement, the acquisition of shares does not include Alibaba shares and Yahoo Japan, and does not include Yahoo's convertible bonds and non-core patents. The latter will continue to be held by Yahoo, renamed and re-registered to become a listed investment company.
This time Verizon only purchased Yahoo's core search business and real estate, and its patents will be sold separately. In addition, Yahoo will retain its shareholding in Alibaba and Yahoo Japan assets, with a market capitalization of approximately $40 billion. Previously Verizon's bid was only between $3.7 billion and $4 billion. The current price has already seen some big gains, which is seen by the market as a good result for Yahoo. But Others believe that the offer is cheap, and Credit Suisse believes that the value should now be $7 billion. Next, Yahoo is selling more than 3,000 patents, possibly reaching $10 billion.
It is worth mentioning that in 2008, Microsoft tried to acquire Yahoo for $44 billion, and the result was a failure due to Yahoo's rejection. Yahoo's sale price is now only one-tenth of eight years ago.
Yahoo, once rated by USA Today, is one of the creators of the Internet miracle of the late 20th century, with the “most informative, entertaining, most appealing and easiest to use web siteâ€. For example, Yahoo! through free search, free mail, free content service drainage, through advertising to achieve profitability, online advertising model became the object of later Internet companies such as Google, Baidu, Facebook and so on. The acquisition of 40% of Alibaba's equity, investment in Yahoo Japan, etc., also brought huge benefits to Yahoo.
Recalling the dot-com bubble of the 1990s, Yahoo’s market value as a pioneer in the industry was as high as $125 billion, and currently less than one-third of its peak. The failure to successfully transform has caused the company to go downhill. Yahoo has been forced to divest assets in the past four years.
In April of this year, Yahoo received about $4 billion to $8 billion in bidding acquisitions in Sunnyvale, California, to sell its core Internet business. Previously, it had twice missed Microsoft's nearly $45 billion takeover offer. In just a few years, the valuation of its core Internet business has shrunk by up to 90%.
After years of painful struggles in the quagmire, this is undoubtedly the best "end."
Mistakes
The spirit of adventure is the way to survive in technology companies.
How does Yahoo go from a market value of $100 billion step by step to decline?
Many foreign media all say that it is unclear: whether it is a technology company or a media, Yahoo has not figured out. This is concentrated in Yahoo's 22-year CEO change in 22 years. The longest term of the seven is six years, and the short position is only four months. The most direct impact of frequent coaching changes is that Yahoo is constantly adjusting its development direction. The development of the Internet industry is changing with each passing day. Yahoo has barely survived under the leadership of CEOs who lack creativity in the past.
As reported in the US Wired magazine, the biggest mistake Yahoo made was a series of decision-making mistakes: it could have bought Google, it could have bought Facebook, but it was because these transactions might seem too risky at the time. High, not worthwhile, Yahoo's shareholders will not like it and give up. However, Internet companies need the founders to have the unique power to do things that are not considered good. Just as Larry Pages pushed Google to buy YouTube, a video site that is still burning money, in 2006; Zuckerberg bought a photo social app in 2012 at a price that was seriously overvalued. Instagram. The spirit of adventure is the way to survive in technology companies.
Second, lack of core competitiveness. Bloomberg Business News Weekly pointed out that in the era of Yahoo's focus on media business, Amazon's Jeff Bezos made a big push into the unprofitable online retail industry, watching the stock price less than a day, and facing the pressure of layoffs But Amazon finally made a big day in a new business area like cloud services and built the Amazon Web Services service. In Google, Larry Page and Sergey Brin came to Eric Schmidt as CEO, and under the joint management of the three of them, they developed a huge "text advertising business." Gold mine."
When Yahoo was busy expanding its business, it slowly lost to a new generation of startups focused on perfecting a product: lost to Google in search, and Yahoo lost to eBay in the auction. The aspect was lost to Craigslist, and Facebook replaced Yahoo.
In addition, Yahoo hopes to boost the company's performance by acquiring startups. The last CEO, Marisa Mayer, made great efforts to save Yahoo. According to Bloomberg, 49 startups were acquired for $2.3 billion during Mayer’s tenure. According to CNBC, Yahoo has used about $17 billion to acquire it, but the company’s current core business valuation is only about $6 billion, which means Yahoo has spent more than $10 billion over the years. .
In addition to the huge capital purchases and the increase in costs, Yahoo’s online advertising revenues have continued to decline, and they have not been able to launch any mobile software products.
Is it a potential stock or a mess?
The acquisition of Yahoo is not a temporary rise, and the savvy Verizon has been deliberate for a long time.
Many people in the industry are not optimistic about this acquisition. Some critics believe that this will be a big failure for Verizon, and there are even people who ridicule that the two are "weak and weak", it is difficult to see what Verizon can really get from this acquisition in the future.
However, Verizon’s acquisition of Yahoo is not a temporary one. In the US, the mobile communications market has become saturated, and many operators are looking for new profit growth points. Verizon is no exception.
Foreign data analysis engineers believe that Yahoo has never defined what it is and what value it can provide in the past few years. Verizon is not content to get content and distribute content, but also wants to master the content industry, which is the main reason they are looking at Yahoo.
Perhaps the most incredible thing is what Verizon switched to with this $4.8 billion? As everyone knows, Yahoo has plugged in almost every field, and the business module has become very bloated. In addition to some properties, Verizon actually got a "big gift" from Yahoo with a built-in product. The British "Guardian" said that in these "big packages", some are potential stocks, and some are bad.
The Guardian believes that Tumblr, acquired by Yahoo in 2013, is a very good deal for Verizon. According to the US analysis website Statista, the total number of US users of Tumblr in 2015 was 23.2 million. It is expected that the number of Tumblr users will continue to rise in the next five years. Verizon took only one-third of the price to win a month of live users over Twitter social network, have to say it is a good deal.
As one of the world's largest online mail services, Yahoo! Mail has been far ahead of many other competitors in a range of feature sets. According to the recent data of Survey Monkey, a well-known online survey service website in the United States, the current monthly user number of Yahoo Mail is still around 20.68 million. According to the statistics of the British Guardian, Yahoo's mailbox registration account has exceeded 280 million, which may shock many Gmail users. Therefore, the Guardian feels that for Verizon, Yahoo Mail may be one of the best ways for its new business to connect to Yahoo users in the future.
As a photo sharing site, Flickr doesn't make much sense for Verizon, its official app comes too late and is rarely updated. Therefore, a large number of start-ups in the same field have taken advantage of this loophole and gradually occupied the smartphone picture market. Among them, Instagram is the winner who wins the most market share of Flickr. In addition to retaining users, The Guardian pointed out that Yahoo's Flickr is not particularly strategic for Verizon.
Regardless of whether it is a potential stock or a mess, the most profitable thing for Verizon is the 1 billion Yahoo users behind these Internet services and a range of advertising technologies such as Brightroll. The huge user base will bring greater profits to Verizon through the form of advertising, in order to stimulate market share and revenue growth, and compete with Google and Facebook. Internet stock analyst Robert Peck believes that for Verizon, taking over Yahoo took over all of its advertisers.
The rest of the acquisition of Yahoo has not been scattered, Bloomberg reported that Verizon has announced the acquisition of GPS vehicle tracking system provider Feetmatics for $2.4 billion to expand the connected vehicle and fleet management market. This is even more indicative of Verizon's intention to constantly invest in new areas. The acquisition of AOL and Yahoo is intended to expand its reach in media, advertising and content operations, while the acquisition of Fleetmatics directly demonstrates Verizon's ambitions in enterprise services, especially enterprise mobility services.
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