How one decision caused Yahoo to miss out on purchasing a $3,370,000,000 company for just $1,000,000
Topics: Google, Microsoft, Business, Technology, Money
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Featured Image Credit: Smith Collection/Gado/Getty Images
Topics: Google, Microsoft, Business, Technology, Money
Search engine Yahoo thought it dodged a bullet when bosses refused to buy a company for $1 million.
Back in the 1990s, the tech race to the top was well and truly on, with Google, Yahoo and others like Ask Jeeves all competing for hits.
By 1998, Larry Page and Sergey Brin, who we now know famously co-founded Google, offered to sell up their then little start-up to AltaVista for a million bucks while studying at Stanford University.
The pair developed Google Alphabet's core piece of tech, PageRank, which uses links to determine a page's importance.
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Not only did AltaVista refuse the deal, but Yahoo similarly rejected it, hoping for users to turn to its own platform for their needs.
It was clearly a major mistake and Yahoo went crawling back years later in 2002 with its then CEO Terry Semel launching an offer to buy it for around $3 billion.
After several months of negotiations, Google snapped back that it wanted $5 billion, and Semel backed out.
Now, Alphabet Inc., the listed US holding company of the former Google LLC where it exists as a subsidiary, is considered one of the wealthiest companies in the world.
As of November this year, it boasts a market capitalization worth trillions, £2.653 T (roughly $3.4 trillion), according to Companies Market Cap.
If that's not painful enough, in 2008, Yahoo also refused to be bought out by Microsoft for $44.6 billion.
The price was certainly generous at the time, offering a premium of 62 percent above Yahoo's closing price the day before Microsoft hard launched its offer, reports Yahoo Finance.
Microsoft had hoped to merge a Microsoft-Yahoo company, inspiring domination across the online advertising market and to create a more efficient company and, crucially, to spark a credible rival to Google.
Yahoo, however, clearly didn't see the vision at the time as the board said after some 'careful evaluation' it thought Microsoft's bid 'substantially undervalues' its brand, online presence and growth forecasts.
In a statement, the directors did hint that they could possibly be open to another offer, but Microsoft doubled-down, stating its initial $40 billion proposal was 'full and fair' while slamming Yahoo's decision as 'unfortunate'.
The offers virtually dried up for Yahoo then, up until 2016, when the brand eventually caved and sold up to Verizon.
To add insult to injury, Yahoo only sold for $4.6 billion, a drop in the ocean (and a significant shortage of zeroes) to what Microsoft had offered.
The sale presented a rather sad story for Yahoo, which once served as one of the internet's first global giants amid the dotcom era to rock bottom in just a handful of years.
In 2021, Verizon then sold its media assets, including Yahoo and AOL, to Apollo Global Management for $5 billion.
Yet rather than close the chapter forever in Yahoo's book, the new company that took over paid homage to its historical name, now fondly going by the friendly name we all know, Yahoo!
As of August this year, there have also been rumors that the company is one of three, alongside Perplexity and OpenAI, that could buy the Google Chrome web browser.
Clearly, there's still hope for Yahoo yet...