Innovate or Die : The Lessons of Sale of Yahoo , Kodak , General Motors : The stunning collapse of Yahoo’s valuation

Written by Anonymous from Net | July 28, 2016 | 0 | Total Views: 6,407

General Motors in 1945 had 44 % of US market of cars . But for the bail out package given by US government, it would have become bankcrupt in 2006 . Its share of US market declined to barely 18% and even lower now .It did not realise that Toyota was far more iunnovative and produced cars which were far more reliable and fuel efficient . Finally Toyota in the year 2013 became world’s largest selling car . Kodaks case was even worse . It controlled 90 % of photography film and camera sales in USA in year 1976. It was the inventor of digital camera . But it made the fatal mistake of discarding its future cash cow which ended the old film based photography .

Yahoo rejected the offer of $ 44 billion from MICROSOFT . It finally was acquired by US company Verizone for just 4.2 billion dollars. Its sad story is given below .

When Hasbro released “Monopoly: The .com Edition,” Yahoo sat in the equivalent of the coveted Boardwalk spot. It was the turn of the millennium, and dot-com mania had pushed the internet company’s valuation well over $100 billion.Who knows Apple and Microsoft may be seeing the setting sun soon .
The stunning collapse of Yahoo’s valuation :Today, Verizon said it is buying Yahoo’s core businesses for $4.83 billion. It’s a fraction not only of Yahoo’s heyday price, but also of what the company was worth throughout much of its public life.By the mid-aughts, Yahoo’s market cap had climbed back from a low of around $10 billion to somewhere between $40 billion and $50 billion. Its valuation and share price pushed higher after Yahoo spent $1 billion on a 40% stake in Alibaba, a Chinese e-commerce company.

Yahoo is not alone: six failed tech companies

Yahoo had a chance to sell for $44.6 billion in early 2008, when Microsoft made an unsolicited offer. At the time, the offer represented a 62% premium over Yahoo’s most recent share price and would have been the largest pure technology deal ever. For media deals, it was second only to AOL’s $112 billion bid to buy Time Warner in 2001. Yahoo turned down the advances.

Marissa Mayer took over as CEO in 2012. Over the next few years, she poured $2.1 billion into acquiring more than 50 startups, but was unable to reverse the slide in Yahoo’s revenue, or stem its loss of talent. By early 2015, what remained of Yahoo’s value was entirely tied up in its Alibaba stake. Its core businesses of search, display, and mobile ads were deemed essentially worthless.

Verizon’s $4.83 billion purchase price isn’t nothing, but it’s a paltry sum compared to what Yahoo used to be worth, and to what many private tech startups are valued at today. On the proverbial “unicorn” list, Yahoo couldn’t even crack the top 20.