The 2010s should be known as the decade of mergers. American Airlines bought out USAir. Dell bought out EMC. Disney even got Star Wars (George Lucas, shame on you for selling out like that!)! Will Yahoo be bought?
Several sources say Microsoft leaders and private equity firms are meeting to possibly acquire Yahoo. There has been talk of Yahoo being bought out. But there’s even more talk of Yahoo CEO Marissa Meyer putting up a fight to keep the company as is. She’s still optimistic the Internet pioneer can turn things around. There is even bickering between Yahoo leaders and potential buyers. Some say any Yahoo deal is absurd; others say not really. You may wonder why Microsoft, one of the richest companies in the world today, is even asking for help in any acquisition. That’s because Microsoft wants to ensure they have a good partner if it’s ever purchased. But Microsoft’s and Yahoo’s relationship was warmed in recent years. They tried to acquire Yahoo back in 2008, and the deal had an ugly ending. More ugliness flared up when Meyer tried to go out of a deal that ended in a failed lawsuit. Since then, their relationship has been cooperative and tolerable. As of today, Yahoo’s cap is $32.5 billion, including China based franchise Alibaba group. It’s current price ranges from six to ten billion. Bidders include Microsoft, Verizon and Comcast.
To us, six to ten billion dollars is a lot of money. But to acquire a major company, that’s pocket change. Is this a clue of how bad it’s gotten for Yahoo these days? I still hate the very words merger and acquisition. But I also understand in today’s business world, it’s sometimes a necessity. Yahoo has seen better days. Profits are shrinking. Leaders and employees are leaving, some by choice, others by layoffs. Competition is beating them mercilessly. Is it time for Yahoo to quit and get bought out?