Last week Yahoo announced more job losses – 2000 this time (14% of its workforce). This latest round of job losses is the sixth mass layoff in the last 4 years.
It marks another chapter in the decline of what was once the most popular site on the net – with a search engine to match.
Just 4 years ago, Microsoft launched a $44bn bid to buy Yahoo, offering $31 per share – a hefty premium on Yahoo’s then share price of $19. Microsoft later upped their offer to $47.5bn ($33 per share).
At the time Yahoo said it would “pursue the best course of action to maximize long-term value for shareholders” – and rejected the offer. So how has the Yahoo share price performed over the last four years?
Yahoo Share Price
- Jan 2008 – $20.78
- Jan 2010 – $16.70
- Jan 2012 – $15.51
The current price is $15.06 which equates to a market capitalization of $18bn – almost $30bn less than Microsoft offered – not exactly long-term value for shareholders…
Yahoo’s intransigence has also resulted in a revolving door for those at the top – each successive year has made it ever more obvious what folly it was to refuse Microsoft’s offer – as the Guardian notes: “the majority of Yahoo’s directors will be new to the board this year, and all directors will have joined since 2010”.
Future For Yahoo
Although the global market share of Yahoo’s search engine has dropped to below 4% (see yesterday’s review of market shares), the Yahoo.com website is still the 4th most popular in the world (Alexa rankings).
As a result, Yahoo still generates large annual profits – nearly $300 million in the last quarter of 2011 which is not too shabby, although still 5% down on the previous year.
What do you think – do you still use, need, want or miss Yahoo? Let us know in the comments.
