Is Yahoo a Good Buy for Verizon?

17 Oct

When it began in 1994 and for many years thereafter, Yahoo was a Web dynamo with tons of viewers, a leading search engine, lots of content, multiple points of contact, and more. But in recent years, Yahoo has fallen on really tough times. Hopefully, it will still have something to offer Verizon after the latter’s recent purchase of Yahoo (click here to see the current URL).

Consider the title of this Forbes article by Brian Solomon — “Yahoo Sells To Verizon In Saddest $5 Billion Deal In Tech History”:

“Yahoo was once the king of the Internet, a $125 billion behemoth as big in its time as Facebook or Google are today. Now it’s being sold to Verizon for comparative chump change. But the biggest story is how Yahoo squandered its massive head start and let each wave of new technology in search, social, and mobile pass it by. Yahoo remains largely the same company it was a decade ago — a portal that hundreds of millions of users rely on for everything from news and weather to key functions like E-mail and games like fantasy football. Yet Yahoo missed the opportunity of a generation to convert its early lead and millions of users into more than just a portal. As the attention of the world shifted to smartphone apps, Yahoo’s last advantage in the desktop world has faded.”

“The one thing that kept Yahoo afloat for this long is Jerry Yang’s risky $1 billion bet on Alibaba in 2005. That bought 40% in what would become China’s E-commerce king. Yahoo sold parts of that holding over time, but its current stake is still worth more than $30 billion at today’s prices. However, the investment was so successful that it became worth far more than Yahoo’s flagging core business.”

 
Now, eMarketer reports still more bad news for Yahoo and new parent Verizon:

“Yahoo is looking at sizeable decreases in ad revenues according to eMarketer’s latest forecast of worldwide ad spending. And recent news about issues with the company’s E-mail service, including both hacked passwords and news of an undisclosed surveillance program, isn’t helping. eMarketer expects Yahoo’s ad business to decrease in size this year—and not for the first time. After a 3.5% drop in worldwide ad revenues in 2015, in September, eMarketer predicted a further 10.2% decrease for 2016. We expect growth of under 1% next year, and 1% in 2018.”

 

5 Responses to “Is Yahoo a Good Buy for Verizon?”

  1. mightymarketingblog October 17, 2016 at 4:24 pm #

    My take on this is Verizon is betting on the gains Yahoo’s interest with Alibaba. As search engine company (with some other tools), Yahoo has been long surpassed by companies such as Google. But then again, maybe a marketing campaign to bring back the Yahoo cowboy chant will put the company in the light again! 🙂

    • Evans on Marketing October 17, 2016 at 4:50 pm #

      It’s not buying Yahoo for Alibaba stock. It wants to integrate Yahoo into Verizon’s technology so it can exploit Yahoo features.

  2. Matthew Pontbriand October 19, 2016 at 4:43 pm #

    I personally do agree with Verizons decision to want to buy Yahoo. If they do fully go forward with the deal they gain a legitimate online source, and with Yahoo usage increasing after they announced the major hack against them things are looking strong for Yahoo. I read in the Wall Street Journal that Yahoo has posted profit again in their recent quarter so Verizon would receive a jump in revenue once they bought Yahoo. Adding onto that the sources, and other applications to the deal like Alibaba are very important and could help verizon overall against new and old competitors.

  3. Emily Baksic October 20, 2016 at 12:31 pm #

    I support the deal that Verizon made with Yahoo because it was only 5 billion dollars. Of course this seems like a lot of money, but in the business world Verizon received a great deal. Even though Yahoo is outdated, Alibaba could significantly help Verizon. Unfortunately, Yahoo cannot compete with Google. The problem was that Yahoo did not take the opportunity to expand their search engine like google did. Yahoo was once above Google, but now google is more than just an internet web base. They have numerous products and applications that Yahoo wishes they had. However, it is important that Yahoo created Alibaba, which can help Verizon significantly.

  4. Palak Patel October 28, 2016 at 3:17 pm #

    I believe that it was a good choice for Verizon to buy Yahoo. With so many ideas and companies that are being presented at this day of age, it can be very easy for big companies to fall behind their competitors. I think that the combination of these two can potentially be something that is very beneficial. Only time can tell if is will be beneficial or not.

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