Yahoo! and the long road to the graveyard
News that Verizon has bought Yahoo! is just another chapter in the company’s long foreseen death. Yahoo’s core internet assets (but not its participations in Alibaba or Yahoo! Japan) will now belong to a company that also owns AOL, another notable internet zombie from the last century, and equally irrelevant. For anybody that knew the old Yahoo! and the talented group of people that made it happen back then, the news is indeed sad.
The $5 billion price tag says it all. This is a company that could have bought Google back in 1998 for $1 million, or for $5 billion in 2002 (an incompetent called Terry Semel offered $3 billion and refused to up the bid after Google asked for $5 billion) and that could have accepted an offer from Microsoft in 2008 for $40 billion. How the mighty are fallen.
Below are my replies to Marimar Jiménez of Spanish financial daily Cinco Días on the Yahoo! sale.
Q. What’s your opinion of the deal?
A. This is basically a fire sale, with the purchaser paying over the odds for assets that it thinks are still worth something. The sale is the official end (the real end took place some time ago) of one of the first internet giants, one of the first companies that was part of the boom at the end of the 1990s, but that failed to adapt to the realities of the internet in the new century. Yahoo! has made a lot of people rich from buying good assets on the web that they later allowed to die, promising companies that later became zombies as Yahoo! lost its talent.
It’s been a long funeral, and now the gravedigger is here: a telecoms company desperate to snap up internet assets at a highly inflated price. Nothing Yahoo! owns is worth anything and can never be brought back to life. The fact that Yahoo! belongs to the same owner as AOL, another of the major internet players of the last century, tells us all we need to know, and says much about Verizon.
Q. What’s in this for Verizon, which when all is said and done is simply the union of AOL and Yahoo!, two internet stars fallen on hard times?
A. All Verizon is doing here is throwing good money after bad by trying to revive assets that are worthless relics. The chances of reviving their services are virtually zero, and there is nobody left in the company able to reestablish Yahoo!. The official liquidator, Marissa Mayer, has a lot of experience and knows how to do what she didn’t do with Yahoo!, will now leave the company with a $60 million check in her pocket (she has since denied this, but nobody knows when she will leave). Anybody who has watched a chapter of The Walking Dead knows what awaits Yahoo!…
Q. What do you think of the new Yahoo! a company that will hold on to Yahoo! Japan and Alibaba? Does it have a future?
A. The parts still remaining of what was once Yahoo! are still worth something: in Japan, Yahoo! has a legion of users who still believe in its philosophy, particularly because it was able to avoid doing what the parent company did. Alibaba is one of the world’s most valuable companies and the share that Yahoo! owns is still worth a lot of money. But that doesn’t mean that a Yahoo! exists able to manage those assets: the company is dead, and those assets have a value that, logically, will be sold. The Yahoo! of the late 1990s has gone forever, and there is no way back.
(En español, aquí)
