Proactive Investors - In an alternate timeline, “let me yahoo it” would be the metonymic phrase used to settle arguments between friends.
Of course, Alphabet’s Google (NASDAQ:GOOGL) search engine pipped yahoo! To the post on that one, but UK readers may be surprised to hear that yahoo! still ranks among the world’s most popular online portals for news and entertainment.
Looking back on yahoo!
Established in 1994 by Stanford University pals Jerry Yang and David Filo, yahoo!’s story is a unique one.
Originally launched as a rudimentary web search portal – the world’s first mainstream one, in fact – yahoo! Was both a benefactor and a victim of the late-90s dot-com bubble.
When the group went public in 1996, Yang and Filo saw their new worths soar to unimaginable heights as yahoo!’s stock price increased sevenfold in just two years.
To get a sense of just how big a deal yahoo! Was, its market capitalisation capped out at US$125bn in 1999, just as the bubble was ready to burst.
This peak valuation was an incredible 13,800% higher than yahoo!’s US$895mln initial public offer valuation.
Yet it was more than just an obscene overvaluation that toppled yahoo!’s supremacy, for an ominous Google-shaped cloud was gathering on the horizon.
An ill-fated acquisition of bargain-bin web hosting service GeoCities in 1999 surely didn’t help either.
Throughout the early-to-mid noughties, Google steadily chipped away at yahoo!’s share of the search engine market until firmly supplanting its former competitor as the King of all things search.
In 2008, Microsoft (NASDAQ:MSFT) offered to buy the crestfallen search engine for a still eye-watering US$44.6bn, which Yang, as chief executive at the time, turned down.
The decision to turn down the offer was heavily criticised by stakeholders. Their anger was justified when, in 2016, yahoo! Was taken private by Verizon (NYSE:VZ) for just US$4.8bn.
In fairness, Verizon’s take-price excluded yahoo!’s US$30bn stake in Alibaba (NYSE:BABA). Yahoo! bought its 40% stake in Alibaba for just US$1bn in 2005 in what was probably the best decision the group ever made.
After 20 years on the public markets, yahoo!’s time had come to a close.
Yahoo! Found itself yet another owner in 2021, when private equity fund Apollo Group bought 90% yahoo!’s operation off Verizon for US$5bn.
Now, the company is set to return to the public markets through a brand new IPO, chief executive Jim Lanzone has declared.
Lanzone, who took the role after the 2021 spin-out to Apollo, believes the company is “ready financially” with a great balance sheet and is “very profitable”.
What is on offer?
As well as its 10 titular brands including yahoo!sports, yahoo!finance and yahoo!news, the group’s subsidiaries also include popular tech-based titles TechCrunch engadget
According to the Press Gazette, yahoo!finance ranked eighth on a table of the most visited news sites in the US in May 2023 with 142mln visits, behind BBC but above The Washington Post.
yahoo!news ranked 14th, wedged between USA Today and The Guardian.
On a global basis, yahoo!news was the ninth most-visited English language news site with 245.9mln visits in May, while yahoo!finance comes in 10th with 224.8mln visits.
As well as a substantial share of the US market, yahoo! remains a popular destination for readers in Canada and parts of the Asia Pacific region.
Yet, concurrent with broader trends, its readership is in decline, with yahoo!news visits falling 13% year on year in May and yahoo!finance visits falling 21%.
Also in line with broader trends, yahoo! substantially reduced its headcount in recent years.
In February of this year, yahoo! culled 1,000 jobs as part of a 20% workforce reduction strategy by the end of this year.
How much this is worth will be determined by the public markets if, and when, yahoo!’s second IPO happens.