For those of you that follow such things, there was a hugely prescient blog post written here at TheWHIR in April. Here you can view the original post entitled, Why Yahoo Should Sell. Among the many other wise words included in this post were the following:
”The truth – though it hurts for Yahoo to hear it is this – they should immediately make a deal with Microsoft. If Yahoo is so certain that they are going to make a TON more money in the next three years, then they should make a deal that includes lots of Microsoft stock. That way, when the Yahoo piece of Microsoft outperforms, Microsoft stock will go up.”
So what was the deal that I was advocating at the time? Microsoft had offered to purchase Yahoo in a deal that was worth $38 billion (that’s billion with a B). Yahoo turned the deal down. Then CEO, Jerry Yang, had said of the deal at the time, ”With the distraction of Microsoft’s unsolicited proposal now behind us, we will be able to focus all of our energies on executing the most important transition in our history so that we can maximize our potential to the benefit of our shareholders, employees, partners and users.”
Okay Jerry. So what has transpired in the meantime? Yahoo’s stock price has fallen to settle at a current company value of…drumroll please…$12.67 billion. So not listening to me has cost the company – wait, let me do the math: $38 billion – $13 billion = $25 billion. Wow – that was really stupid.
So now the financial cost has caught up with CEO, Jerry Yang – the man that most credit for the failed deal. Mr. Yang announced this week that he would step down as CEO of Yahoo. And so the man that popular investment television host Jim Cramer labeled a ”value wrecking ball” will go. I contend that it’s too late. Yahoo is essentially done. The value is gone. Microsoft has walked away – really.
This saga should act as a lesson for those of us fortunate enough to be working deals – of any size. Don’t let the big buyer get away. You may never get another chance.
This content was written by Derek Vaughan exclusively for the Web Host Industry Review.
About Derek Vaughan
Derek Vaughan has been actively marketing on the Internet since 1995. His extensive online marketing experience includes the online direct marketing of books for $300 million per year NYSE traded book publisher Thomas Nelson. Mr. Vaughan also marketed products online at the Walt Disney Company as the online marketing manager of ecommerce for ESPN.com. He was also the marketing manager for the launch of the NASCAR Online Store in October of 1999.
More recently Mr. Vaughan turned his attention to online marketing for the Affinity Internet, Inc. family of companies - which owns a broad portfolio of web hosting brands. Additionally, Mr. Vaughan served as Vice President of Marketing for Aplus.Net and helped them establish a strong position in the web hosting field. Derek has also serverd as the VP of Marketing at HostMySite.com.
Derek Vaughan holds undergraduate degrees from both Indiana University and Purdue University, and has earned a Master of Business Administration degree from the Owen School at Vanderbilt University.
Through his theWHIR blog, Derek will touch upon online marketing in the Web hosting space, web hosting events and industry trends.
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