Now in business reasonable people examine revenue potential, look at cash flows on a projected basis, consider contingencies.
In the mid 90s I taught a finance course at Columbia Business School and one case was AOL. I saw it as a total zero. My students saw it differently. Warner bought it and it almost destroyed the company.
Now Verizon wants Yahoo. Why? What "value" does it have? Verizon has assets in licenses, exclusive rights to ever increasing assets. Yahoo has nothing. As a shareholder and former executive, I really wonder who came up with this idea.
As the NY Times reports:
The end of Yahoo as an independent company may be near, and Verizon — long considered the leading contender to buy the aging web pioneer — is the most likely acquirer. The
two companies are in advanced talks over a takeover of Yahoo that could
be worth close to $5 billion, a person briefed on the matter said on
Friday. Any
transaction would be for Yahoo’s core internet business, although it is
unclear whether a deal would also include other assets like real estate
or patents. Both
companies are hoping to announce a deal as early as next week, this
person said. Verizon is scheduled to report earnings on Tuesday. Still,
no final deal has been reached and the talks could still falter, the
person cautioned. One of the other finalists could also re-emerge with a
higher bid. A
spokesman for Verizon declined to comment, while a Yahoo spokeswoman
said the company would not comment “until we have a definitive agreement
to announce” because it wanted to maintain “the integrity of the
process.”
How does one monetize this company. It has not for wont of trying, yet they are still a dead pig. Verizon is in the infrastructure business. It has never, and I mean never, demonstrated its ability in content. Look at AOL. Now egos may drive the deal but from a fiduciary duty perspective it should be cash flow. That is currently elusive.
Posts
