Pixel Envy

Written by Nick Heer.

A Short History of Yahoo Acquisition Attempts

Now that Verizon has made official their purchase of Yahoo for $4.83 billion, it’s worth taking a look at the comparative value of this acquisition. I’ve already contrasted its price with how much Yahoo paid for GeoCities and Broadcast.com, but this is not the first time that a company has tried to buy Yahoo itself.

Back in February of 2008, Microsoft offered $44.6 billion to acquire Yahoo, in an attempt to better compete with Google. At the time, analysts speculated that it would be a difficult merger for antitrust reasons — an idea that seems positively quaint today. In the end, Yahoo rejected the offer:

After careful evaluation, the Board believes that Microsoft’s proposal substantially undervalues Yahoo! including our global brand, large worldwide audience, significant recent investments in advertising platforms and future growth prospects, free cash flow and earnings potential, as well as our substantial unconsolidated investments.

Later that year, Microsoft tried again, offering about $20 billion for Yahoo’s search functionality. While it was also rejected, Yahoo and Microsoft entered into a deal in 2009 that would use Bing’s search technology to power Yahoo. That deal was re-signed last year; its value was not disclosed.

While Yahoo has an illustrious history with Microsoft, part of the negotiations in 2008 involved a familiar friend. Nick Tabakoff of the Australian:

But any joint move by Microsoft and News could face stiffening resistance from Yahoo, with reports suggesting the portal and internet search directory is itself in discussions with Time Warner’s AOL about the two companies joining forces to combine their online operations.

Yahoo’s reported negotiations with AOL are being seen as a direct attempt to make it harder for Microsoft to control the portal. The reported move by News Corp, which owns The Australian, to enter the fray for Yahoo follows Microsoft’s February $US44.6 billion takeover bid for the group.

News has been mulling an alliance with Yahoo for much of the past year.

Not only was News Corp. involved in these negotiations, so was AOL. There were even suggestions at the time that AOL and Yahoo could merge.

Verizon bought AOL last year. In their announcement of the Yahoo acquisition today, they noted:

Yahoo will be integrated with AOL under Marni Walden, EVP and President of the Product Innovation and New Businesses organization at Verizon.

At last.