Bidders go yahoo for Yahoo

Savanna Shackleford | Contributing Writer

Yahoo Inc., a formerly massive technological company, has lost its popularity through the years. Once a money making giant, the company never recovered from the dot-com bust of the early 2000s, and now after a long financial struggle, Yahoo has been put on the market.

In the early 2000s, Yahoo was at its peak with a net worth of approximately $225 billion, according to CNN. However, after the dot-com bust that crippled many other technology companies, Yahoo suffered greatly as its stocks lost value and the public became less interested. Other similar companies like Amazon and eBay were able to recover from their losses in ways Yahoo could not.

Over the past nine years, Yahoo’s revenue loss and management changes have cost the company around $190 billion, and it is now only valued at a mere $35 billion compared to its peak of $225 billion, according to CNN.

Additionally, the $35 billion that remains in the company’s valuation mostly comes from Yahoo’s partnership with the Chinese e-commerce company Alibaba, not Yahoo itself. The stock market values Yahoo as virtually worthless, and many have linked most of Yahoo’s problems back to new CEO Marissa Mayer, according to CNN.

When Mayer was hired in 2011, the company expected things to improve, but Mayer was unable to live up to their expectations. She promised positive advancements and changes that didn’t occur, including a break from the company’s ties with Alibaba.

“In 2016, we will tighten our focus and prioritize investments to drive profitability and long-term growth,” said CEO Mayer in a statement to Business Insider. “A separation from our Alibaba stake, via the reverse spin, will provide more transparency into the value of Yahoo’s business.”

The separation never happened, making many question the motives of the company’s CEO and board. The separation was supposed to help alleviate any perception of tax risk, however it was unclear if the IRS would let the avoidance of the tax issue happen, according to Business Insider.

“Among other factors, we were concerned about the market’s perception of tax risk, which would have impaired the value of Aabaco stock [Yahoo owns 15% of this Chinese e-commerce company] until resolved,” said Maynard Webb, Yahoo’s board chairman in a Business Insider statement.

As predicted by SunTrust analyst Robert Peck, Yahoo is now in business purgatory. Back in 2015, Peck was the first to predict that the new CEO would not live up to the expectations for her and that the business would be sold.

“Given the simplicity and speed of a sale and the lack of a desire by investors to undergo a year-long spin process, we think a sale of the core or entire company is most likely,” said Peck in a statement in Business Insider in 2015.

Now in the first half of 2016, as Peck predicted, the company is going under. Other big-time companies are lining up to make bids. Most of these companies have recognizable names such as Microsoft, Daily Mail, Time, Google and Verizon. In fact, back in 2008 Microsoft made a $45 billion offer that Yahoo refused. 

“The board has fiduciary obligation to engage with any legitimate person that comes forward with a good offer,” said chairman Webb in a statement to Business Insider.

Yahoo has given their bidders until April 18 to make their offers. By that time, Yahoo will either enter into an agreement with a bidder or refuse all offers. Either way, CEO Mayer will probably be fired and given a large severance package as a farewell.

The population doesn’t seem to be too surprised about the end of Yahoo. It was not a favorite for many students growing up, and most teachers utilized Google search engines over Yahoo. Still, for the millennials, many memories were made using Yahoo’s email service.

“It was my first email account, and I made it when I was 11 to make a Myspace account,” said UNC Wilmington sophomore Kelley Johnson. “So that does make me feel old.”

This may signal the end of nostalgic interactions with Yahoo’s various technology services, but plenty of other large companies will be taking over various media platforms. Companies like Apple, Microsoft, Google and Amazon, for example, have already taken the lead in not only the internet, but in television and innovation technology as well.