It seems so long ago – but it was just four years when Marissa Mayer was recruited from Google to become the CEO ofYahoo YHOO +1.30%.  In 2012, and Dan Loeb, the Board Member from third Point Capital decided to pass over then-acting CEO Ross Levinsohn and bring in Mayer as a respected but untested CEO. The reports at the time said that the Board had chosen to be “product led” rather than “content led” as Levinsohn would have presumably driven strategy. Less than a year later, Loeb and two fellow Board members from Third Point resigned – selling 40 million shares back to Yahoo. Third Point made about $1 billion on the deal.

Yahoo! President and CEO Marissa Mayer

Mayer’s strategy at the time was to steady the ship, demand more engaged performance from existing employees, trim the staff, and go on an aggressive acquisition shopping list. Among the purchases as cataloged by Gizmodo was Stamped, OnTheAir,, Alike, Jybe, Summly, Astrid, GoPollgo, Rondee, Qwiki, Sobni, Ztelic, RockMelt, Look Flow, IQ Engines, Bread, Ptch, EvntLive,, SkyPhrase, PeerCDN, Cloud Party, Incredible Labs, distill, Vizify, Blink, ClarityRay, Zovari, Luminate, booked, MessageMe, Flurry, BrightRoll, Polyvore and more. Of course, let’s not forget the purchase of Tumblr, with a $1 billion dollar price tag.

But today, that strategy has been proven all but a failure. Last year, Yahoo restructured, including writing down the valuations of some of its brands like Tumblr. In all, it posted a loss of $4.4 billion. Ouch.


And so, a sale is all but imminent with Verizon. A deal would combine Yahoo with AOL – a transaction that AOL chief Tim Armstrong has wanted for some time. It would give AOL assets including search, real estate, finance, tech, sports, Yahoo mail and Yahoo messenger.

Bloomberg News says the companies were discussing a price close to $5 billion, citing anonymous sources. “Verizon has always been the favorite because it has the largest potential synergies and therefore can pay the most,” said professor Erik Gordon. “The price negotiations still can be tough because it also doesn’t need Yahoo. It can put its money into its AOL franchise.”

If the transaction closes, Verizon’s combined Yahoo/AOL entity would have cost the telco almost $10 billion.

Source: Forbes

Published by General Olomu