Tomorrow morning, Verizon will announce its plan to buy Yahoo’s core assets for a pitiful $4.8 billion according to “two people with direct knowledge of the situation,” Bloomberg reports. Considering that at the peak of its success, Yahoo was valued at $125 billion, this is yet another benchmark moment in the company’s fall from grace. In 2008, the company rejected Microsoft’s offer to buy it for $44 billion.
Since this is just the sale of Yahoo’s core assets, the company will still have its Alibaba stake and Yahoo Japan Corp., which Bloomberg estimates is worth over $40 billion.
Like Nelly’s hit single “Country Grammar” and trucker hats, Yahoo peaked in the early 2000s. It made some major mistakes at the beginning, like turning down the opportunity to buy Google for $1 million in 1997 and again in 2002.
Yahoo’s reason for turning down Google (which, by the way, is now valued at over $530 billion) in 1997? In The Google Story, David A. Vise writes,
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.
Oof, so their judgment hasn’t always been so great. They also passed up an opportunity to buy Facebook for $1 billion in 2006. (Facebook is now valued at around $350 billion.)
Still, there was excitement in the air when the already failing company brought on Marissa Mayer as CEO in 2012. Hell, the company even Photoshopped her face onto a sign designed in the style of Shepard Fairey’s famous Obama “hope” poster to welcome her.
So where did Mayer go wrong? In post for Gizmodo, Sophie Kleeman explains that while it’s unclear, it certainly has to do with her acquisition of 53 different companies during her tenure at Yahoo, 41 of which she shut down.
Notably, the company’s purchase of Tumblr in 2013 was one of Mayer’s biggest failures, due in part to the fact that no one can figure out how to monetize the blogging platform.
Now, Mayer is expected to resign, and while she might feel embarrassed about her failure as CEO, she stands to make a nice $57 million in severance, according to the New York Times.
What will Marissa do with that $57 million? We can only hope she invests in more Zamboni-related activities.
Update July 25, 8:09am: Yahoo confirmed the sale this morning.