Yahoo, once valued at $100 billion, was sold to Verizon for only $4.83 billion last year in 2016, and this was after Microsoft made Yahoo and offer of $43 billion. So what went wrong? Why was Yahoo sold at only 10 percent of what Microsoft offered to buy it for?
When Yahoo started to gain attention and was in prime of its business, it was approached by two students who wanted to offer them an algorithm, which would have helped the visitors of Yahoo, Yahoo turned down the offer and the student that later became the founders of google with same algorithm which was presented to Yahoo. Only if Yahoo had bought that algorithm, then the world as we know today would also have been different. After the Dotcom bubble, things started to change for Yahoo. It started to lose out on the business that it was good for, Yahoo mail was replaced by Gmail, its messenger was replaced by the fast changing technology social networks, it lost its business to its competitors who were doing those things better than Yahoo. During All this time Yahoo started to take over different businesses, and in total it had holdings worth of $33 billion. Which was made up of long list of companies, and in the process of this, they offered to buy Facebook for $1 billion and the founder of Facebook turned it down, and according to some sources if the bid had been more than $1 billion than the CEO of Facebook would have been forced to sell the company by the board. Moreover, Yahoo had 6 different CEOs over 6 years.
All these mistakes point out to one major mistake, which could have saved Yahoo and changed the fate of the company and how we see the world today. It was poor investing decisions by the management of Yahoo. Yahoo started too loose its core business to its competition and in return it invested in too many businesses with hopes of sustainable source of return, but none of those businesses turned to be savior for Yahoo. Instead if Yahoo would have remained in its core business and invested in relatable fields things would have been different for Yahoo. As google and Facebook did. Google is not only a search engine. It defines what technology is for us today. From mailing, to YouTube, to mobile phones and operating systems. Facebooks what once was just a social networking sight, now owns WhatsApp, twitter and much more. It has its own dedicated mobile phone Applications.
This leaves us with an important lesson, that companies without proper leadership and guidance are bound to fail. The company that was once valued at $100 billion was sold for only $4.83 billion. Businesses with leadership and guidance issues, should look for consulting firms. These business consulting firms could help with the inconsistencies of the leadership and provide deep market research, proper investing strategies, and business plan. These plans can prove to be the only source of survival of your business. If you are looking for business consulting firms, contact Sayub & co. today. With Sayub & co. consulting services your business will be equipped with the right vsion of tomorrow.
No comments:
Post a Comment