Verizon Snaps Up Yahoo: A Yahoo! Or Yah Boo!


The sale of Yahoo’s core assets to Verizon for a reported $4.83 billion, leaving Yahoo shareholders with roughly a $41 billion investment in Chinese Internet giant Alibaba and a few other small assets, really does mark the end of an era.  The former Internet powerhouse has struggled for over a decade to find its voice, and never was able to get it right after its early success as what was then the Swiss Army knife for all things online. 

I am not in the habit of looking at definitions of things to provide context for industry convulsions, but in this instance there are two that somehow seem appropriate.  The first is the one Yahoo capitalized on early with its commercials where a loud voice screamed Yahoo!  For those not familiar with U.S. slang, the term was the equivalent of emphatically saying “Yippie!,” or to use an old 1960s phrase, “Right On!”  There was great excitement about using Yahoo to find “stuff,” and advertisers flocked to get on the bandwagon. However, while the times changed and Google became the default search engine and social media became the place to not go but stay, Yahoo just could not figure out who it was and why people would want to spend time on the site.  And, as eyeballs, hearts and minds looked elsewhere, taking with them advertising dollars, Yahoo fiddled while its assets burned.

This is why, unfortunately, the second definition may be a better descriptor.  The word yahoo first appeared in 1726 in Jonathan Swift’s book Gullilver’s Travels. A made-up word, Swift invented a race of brutes, with the form and vices of humans, who Gulliver met in his final voyage.  The term yahoo then became a noun to be applied to humans who were unpleasant and for lack of a better word “stupid”.  

As noted, this is a description that speaks for itself in many ways as a series of CEOs at the company, including the latest, much heralded savior Marissa Mayer, never could create the differentiated value/distinctive capabilities required to be competitive.  They ceded search to Google, missed such opportunities as streamed video, mobility and auctions, blew what should have been a prime area in email and messaging and could not create a compelling group of other content assets.  They also passed over the years on attractive offers to be sold.  They wanted to be “E”verthing to everyone and ended up being not much for anyone.

In fact, what has been amazing is that Yahoo lasted this long.

As I have written about on many occasions, the world going forward is about ecosystems and what I have called the “Hotel California Effect.” The later is about building an online presence where visitors, as the lyrics of the popular Eagle’s song say, “can check out any time you want but you can never leave.”  That is the secret to the Google and Facebook success. Translated, it means if I am spending time on those sites I am not somewhere else.  To put it bluntly, that is what advertisers want, i.e., as much of an opportunity as possible to not just be in front of customers but also have the ability to capture information about them.  Yahoo literally and figuratively missed the boat and finally had to admit the ship had sailed and was not coming back.

There is a certain irony to all of this.  On a personal note, back in 1994, I met Yahoo founder Jerry Yang at a breakfast and he convinced me to change my homepage from AOL to Yahoo.  I will admit that on my home PC it is still my homepage because that is where I have my stock portfolio listed, and I do occasionally rely on Yahoo Finance and the stock index for doing research. 

Whether Verizon’s AOL unit can leverage what remains of the Yahoo visitor base remains problematic.  Indeed, while the $4.83 billion may seem like a bargain given Yahoo’s fall from its $125 peak valuation in 2000, is problematic as well, particularly as the Alibaba stake goes to existing shareholders and not Verizon.  The challenge is that while Yahoo still has lots of traffic, in the words we like to use for evaluating such traffic, it is not “sticky.”  Hence, the value of the experience as well as the value of the brand, in an era where start-ups can get millions of customers in months, is daunting to say the least.

Verizon, along with other traditional telecom companies, does need to have that Hotel California Effect and offer its subscribers something more to ward off incursions by OTTs and develop new revenue streams.  Yahoo at this price is probably not a bad way for Verizon to dip its toes deeper into the content and portal business to keep customers engaged so they do not leave, but placing a bet on what could be now seen as “old media” rather than investing in a hot start-up may not be the best way to go. 

We shall see if this is another good definition of Yahoo or if it will become a yah boo!   

Edited by Alicia Young
Get stories like this delivered straight to your inbox. [Free eNews Subscription]
Related Articles

Protecting Your Digital Fortress Through Threat Exposure Management

By: Contributing Writer    5/23/2024

In today's digital landscape, cybersecurity threats loom large, posing significant risks to businesses, organizations, and individuals alike. With the…

Read More

Why Block Websites? Understanding the Reasons

By: Contributing Writer    5/6/2024

The internet is such an expansive network where every click can lead to information, entertainment, or opportunities for productivity. However, this a…

Read More

ChatGPT Isn't Really AI: Here's Why

By: Contributing Writer    4/17/2024

ChatGPT is the biggest talking point in the world of AI, but is it actually artificial intelligence? Click here to find out the truth behind ChatGPT.

Read More

Revolutionizing Home Energy Management: The Partnership of Hub Controls and Four Square/TRE

By: Reece Loftus    4/16/2024

Through a recently announced partnership with manufacturer Four Square/TRE, Hub Controls is set to redefine the landscape of home energy management in…

Read More

4 Benefits of Time Tracking Software for Small Businesses

By: Contributing Writer    4/16/2024

Time tracking is invaluable for every business's success. It ensures teams and time are well managed. While you can do manual time tracking, it's time…

Read More