
Yahoo sold to US telecoms giant Verizon - kartikkumar
http://www.bbc.co.uk/news/business-36879831
======
TheMagicHorsey
I did a little work as a developer for Verizon's ecosystem back in 2007. Let
me just say, from what I could see, they were a huge, bureaucratic company
without a single redeeming cultural trait. The managers seemed like a bunch of
frat boys who had been raised up into positions of authority through some
inscrutable lottery, and none of them seemed to possess an iota of analytical
capability or human management talent.

I left that position and later worked for a bunch of tech startups and larger
companies that, while not perfect, at least had enough good people in them to
redeem my view on the human race.

I cannot imagine why anyone would actually work as a mid-level worker in
Verizon unless you had absolutely no other options in life.

~~~
function_seven
Out of curiosity, which Verizon did you work for? The former MCI/Worldcom unit
("VZ Business"), the GTE/Bell Atlantic one (Landline, FiOS, etc.), or Verizon
Wireless? As far as I know, that company has remained fairly fractured, and
operated as if they were three different companies.

~~~
billskills
vzw actually is a different company, which is partly owned by vz. Fba/fgte are
practically separate companies too. I worked for fba (former bell Atlantic)
for years and can attest, it's no place for capable doers. It's unbelievable
how many layers of dysfunctional middle management are in there, supported
only by the fact that vz owns so much legacy infrastructure.

~~~
function_seven
Who owns the rest of it? I know Vodafone used to, but VZ bought their share
out a couple years ago.

Totally agreed on BA/GTE. I used to contract on the GTE side of the house, and
I saw how little it mattered whether you were good or bad at your job. All
reports I hear from the new Frontier sound like it's even worse now.

------
tehwebguy
Verizon shouldn't be allowed to own any web properties. They inject a unique
subscriber identifier into your HTTP requests unless you turn it off.

[http://www.verizonwireless.com/support/unique-identifier-
hea...](http://www.verizonwireless.com/support/unique-identifier-header-faqs/)

~~~
ajmurmann
No company that sells Internet access should be allowed to also be in the
content business.

~~~
droopybuns
Should Google be allowed to sell fiber?

I think the suggestion that carriers shouldn't do this is wrong and naive and
here is why:

User count should not ever be exponential of customer counts. It inescapably
results in fundamentally unethical business practices where users are
exploited.

That is google's business model and they stand uncontested today.

Carriers that end up doing any amount of content monetization will never
disrupt Google, but they can create pressure that drives the cost of ads down,
making google's life harder. I think this is so important that I am happily
willing to endure the judgement of everyone here. I know this is downvote
bait, but I keep thinking at some point everyone here will see the net
positive on all possible angles.

~~~
manigandham
> User count should not ever be exponential of customer counts.

This makes no sense.

This is the backbone of the entire internet. Ethics and the value that users
get from a company/service are all subjective, there's no hard rule that you
can lay down like this.

~~~
droopybuns
It makes plenty of sense. I am annoyed that you cast me as illogical simply
because you disagree. Something has changed in modern discourse and your
reaction has become distressingly common.

Here is an article from 2012, enumerating the same point:
[http://www.forbes.com/sites/marketshare/2012/03/05/if-
youre-...](http://www.forbes.com/sites/marketshare/2012/03/05/if-youre-not-
paying-for-it-you-become-the-product/#4b997d71b445)

Here is another from 2010: [http://lifehacker.com/5697167/if-youre-not-paying-
for-it-you...](http://lifehacker.com/5697167/if-youre-not-paying-for-it-youre-
the-product)

If this is a new idea to you, you might want to consider broadening your
debate network.

~~~
manigandham
This isn't a new idea or theory, it's older than the internet itself. So what?

This is a tired argument that doesn't really make a point. People being "the
product" isn't some inherently bad thing. These platforms have so many engaged
users because they do actually deliver value to those users, whether you think
so or not.

Maybe you want to pay for a social network but others want it free and are
fine with the trade-off. Both perspectives are fine and what's important is
that you have a choice, but saying that " _user counts should never be
exponential of customer counts_ " still makes no sense as it not up to you to
decide everyone else's fate. Does that really seem logical to you?

~~~
droopybuns
Strawman.

>>it not up to you to decide everyone else's fate

I'm not asking anyone to live to my values. Many others share them.

I think the point that users should not exceed customers is easy to
understand. Many people agree with me. Many others dont.

I have turned down an offer at Google because I couldn't reconcile the bad
stuff. I wish more people agreed with me, but I don't say that those who don't
are illogical. They simply have different values. That is OK if you value
diversity.

~~~
manigandham
> User count should not ever be exponential of customer counts.

This is what you wrote. Why make this proclamation? Why should free users be
limited regardless of whether they derive value from the service and are ok
with being "the product"? The ethics of a company and the value they provide
to a user are all subjective and thus you cannot state that the company is
unethical or the users are being exploited as a rule. This is why your
statement does not make sense.

> Strawman ... I have turned down an offer at Google because I couldn't
> reconcile the bad stuff. I wish more people agreed with me, but I don't say
> that those who don't are illogical. They simply have different values. That
> is OK if you value diversity.

This is actually a good example of a strawman argument - and completely
irrelevant to the discussion. I'm not calling you illogical and I don't see
how diversity has anything to do with this. You've made a statement and I
explained why it doesn't make sense (see above). You're still free to say it
and I'm still glad you did as it led to this discussion.

Please focus on the arguments instead of being so defensive and using these
passive accusations.

~~~
droopybuns
>>The ethics of a company and the value they provide to a user are all
subjective and thus you cannot state that the company is unethical or the
users are being exploited as a rule.

This seems to me to be the crux of our disagreement. You believe ethics are so
subjective that ethical stances should not be expressed.

I reject that whole heartedly.

Businesses with user counts that dwarf customer counts generally are
exploitative and bad for the consumer.

They are incented to harvest information that results in privacy violations.

~~~
manigandham
> ethical stances should not be expressed

Who is stopping you from saying anything? You expressed it and I said I'm glad
you did. Again, please stop being so defensive for no reason, it's not
conducive to any discussion.

> Businesses with user counts that dwarf customer counts generally are
> exploitative and bad for the consumer. They are incented to harvest
> information that results in privacy violations.

Not really, again you say "exploitative and bad" but this is according to you.
It's up to the actual consumer to consider this for themselves, which is why
there's no valid way to make a statement as how to how this generally works or
that users should always be fewer than customers. You can look at open-source
companies that produce software used by thousands but sponsored by a few
customers as just 1 of many counter examples.

------
chollida1
Yahoo got all cash, which is nice as it gives them more flexibility, the last
thing they'd want after the Alibaba spin off fiasco is to have to try and sell
4.83 Billion in Verizon stock.

Bloomberg just put up a head line saying that Yahoo will return all the cash,
minus Operating Costs to the share holders. If anyone has any guess as to how
much "operating costs" will be, please email:)

So I guess queue Alibaba and SoftBank now to come in and divvy up the rest of
the company?

From Matt Levine:

> "Marissa Mayer, Yahoo’s chief executive, is not expected to join Verizon,
> but she is due to receive a severance payout worth about $57 million,"
> bringing her total compensation for about four years of work at Yahoo to
> $218 million.

Wow! So I guess the now decade old valley trick off spending a "few" years at
google to start your career and leveraging the google name to get another job
really is the way to go:)

~~~
existencebox
There has been a lot of debate as to whether she succeeded or failed at her
job, but at the end of the day all I can say: I really chose the wrong career
path, as I can't imagine a scenario where a dev's comparative performance
results in a 218m$ payout. (In more direct terms, I would gladly take the
internet-hate-firehose in the face if it means making even single digit
millions.)

To make some more reasonable statement to try and add value to this non-
comment, more than anything of yahoo's fall, every time it gets brought it it
just makes me shake my head at the current state of compensation. For the same
reason I can't comprehend what freedom and power $10m+ buys you, I can't
comprehend how we change the system such that more of us get more of that.

~~~
moinnadeem
Soon-to-be a freshman in college. If you don't mind me asking, what career
path do you wish you took?

~~~
SeanDav
I believe he was being a being slightly tongue in cheek. In reply to your
question though - never follow the money, follow the path where your interests
lie and where your strengths lie. Biggest career mistake I ever made was to
move from a job I really enjoyed to another because they offered to more than
double my salary.

~~~
speeder
But you still get to eat right? I followed my interests, and now can't afford
food, literally. I should have went for a job a hate but that paid well.

~~~
ryanmarsh
This. I hate my job but tell me some other way I can make $300k (I'm basically
doing management consulting). I'm 38 with 3 kids and my wife doesn't earn an
income (she homeschools the kids). I suck it up so they're well provided for.

~~~
evmar
300k is nearly 6 times the median US income, and even the median US income is
double that of high-quality-of-life places like Germany. Literally most of the
planet has happy families with significantly less money than that.

It's facile of me to diagnose your life over the internet but I often think of
the deathbed quote:

"I wish I had earned more money and spent less time with my family" \-- no one
ever

~~~
geodel
I think that deathbed quote is more about people who had reasonably successful
life and had family. I doubt that 100s of millions in 3rd world dying in
penury with no family to talk of would make similar statements. Perhaps their
statements would be so pedestrian as not to be noted down.

~~~
ryanmarsh
I dated a Columbian girl (an illegal actually) before I met my wife. I
remember one day she slapped me across the face and with tears of anger made
it clear how stupid I was. My mistake? Uttering the bullshit platitude:
"better to be poor and happy than rich and miserable". She said, "you don't
know what poor is, we couldn't even afford a toothbrush. We weren't happy we
were miserable. How dare you."

------
cs702
Less than the $5.7 billion Yahoo! paid in 1999 for Mark Cuban's Broadcast.com:
[http://money.cnn.com/1999/04/01/deals/yahoo/](http://money.cnn.com/1999/04/01/deals/yahoo/)

Times -- and fortunes -- change.

~~~
sandstrom
Had to look it up, for curiosity:

    
    
        In April 1999, Yahoo! acquired the company for $5.7 billion 
        (or over $10,000 per user) in stock. [...] The company had 570,000 users.
        -- Wikipedia
    

These 570k users only listened to audio, seems like the biggest waste ever.
Cuban got a bunch of (undeserved?) money and Yahoo lost the same amount. Feels
like a pointless transaction.

~~~
tuna-piano
I'm not so sure. Here's my reasoning, but I'm just using logic, I'm really not
super in-tune to this stuff.

If the company knew thought its stock was 10x overvalued (Yahoo's stock did
drop 90% a year or so later) then they really only sold it for $570 million.
That is, if Yahoo knew its stock would be worth 1/10 of its current value in a
year, buying a company with $5.7B in stock will add value to Yahoo so long as
The acquired company ends up being worth >$570M.

That being said, if they knew their stock was overvalued, it would be best to
issue additonal shares, as $1 is worth $1 regardless. Similiar to how
undervalued companies should buy back their stock.

~~~
ojosilva
I think back in those insane dotcom bubble days valuation and stock prices did
not play well together. The acquisition moved forward because it was sound
business (Yahoo's planned to become a media corp) and increased shareholder
value, as the best way to profit from an overheated market was to hoard
investors attention relentlessly.

------
hkmurakami
_> Shortly afterwards, Verizon announced it would start combining data about
its mobile network subscribers - which is tied to their handsets - with the
tracking information already gathered by AOL's sites._

I was talking to a friend who is in the Telecom industry in Japan, and
apparently this sort of arrangement is not legal there. EU is generally wary
of such arrangements as well. So this is a merger whose product synergies
would not have been possible in other jurisdictions.

In recent years I recall advertisers being skeptical about the quality of
eyeballs on Yahoo!'s platform. The pitch to the same advertisers already seems
more compelling, though the premise does make me feel uneasy.

And I imagine Mayer will be getting her full 9 figure severance package. So
much for rewarding success and having interests aligned.

~~~
blahi
The problem with yahoo was never quality of the traffic. They have the most
coveted audiences cornered. Their problem is the lack of good ad units. They
have banners... That's unacceptable in 2016.

~~~
hughw
Not familiar with ad tech... what _is_ the standard for acceptable, in 2016?

~~~
rahkiin
I think it is square patches between textual content. They are everywhere on
newssites. Also, 'sponsored content' as on twitter and facebook.

~~~
themartorana
Called "native ads" in the mobile space, which are all over Yahoo!'s mobile
apps (see Yahoo! Weather for a simple, relevant example), and offered to other
publishers through their Yahoo! Gemini platform.

So not only does Yahoo! run the currently "hot" ad unit (they also do rewarded
video), they own it.

------
STRML
So this means Mozilla's insanely bad clause (for Yahoo) [1] kicks in?

1\. [http://www.recode.net/2016/7/7/12116296/marissa-mayer-
deal-m...](http://www.recode.net/2016/7/7/12116296/marissa-mayer-deal-mozilla-
yahoo-payment)

~~~
rch
I'd bet that Mozilla continues to work with Yahoo/Verizon.

~~~
rblatz
Or they could switch back to google or bing and grab nearly an extra billion
dollars between now and 2019.

Seems like a no brainier to Mozilla.

~~~
kevin_thibedeau
Would be funny if they switched to Bing since that is what Yahoo search is now
any way.

------
ubersync
Why isn't this mentioned/discussed anywhere. In 2008 Microsoft offered $45
Billion to acquire Yahoo. Then Yahoo CEO Jerry Yang rejected the offer, saying
that the bid "substantially undervalues Yahoo." Microsoft raised the bid to 50
Billion, and it was yet again rejected. After that MS withdrew its bid. 8
years later, at 10% the original offer!

~~~
vijayp
Well, YHOO's total market cap is now about $37.36B, so it's not a complete
travesty. (MSFT would have gotten the Alibaba investment with the $45B offer)

~~~
dpark
Eh, it's a pretty complete travesty. 8 years later the stock is still almost
20% below the $45B offer price, which was by the way a 60% premium over the
market cap at the time.

I still have trouble wrapping my head around why Microsoft even made the
offer, but I have even more trouble understanding why Yahoo rejected it.

~~~
dangrossman
In those intervening 8 years, Yahoo sold a big chunk of its BABA stock back to
the company. If they kept the number of shares they had at the time Microsoft
made the offer, that asset alone would be worth $48B today. If you add in the
Yahoo! Japan holdings, the company would be worth at least $56B, even if the
core Yahoo! business were worth nothing. It wouldn't have been a bad buy for
Microsoft.

~~~
charlesdm
BABA wasn't public back then, though. It was inherently hard to value.

------
cocktailpeanuts
To the guys on this thread who talk like they're some mini-pundits who know it
all saying this is what Yahoo gets for walking away from larger valuation
offers from a decade ago: No one thinks you're intelligent for pointing out
something years after the fact. Tech companies come and go, and I would bet
that a lot of the hottest tech companies right now will meet the end just like
Yahoo did in a decade (or less).

Imagine if Google becomes irrelevant in 10 years, and end up selling itself to
whichever hottest tech company that will be around then. Will you say "Told
ya! Google should have sold to Yahoo when Yahoo was going to acquire them for
$3 billion!"

~~~
subsection1h
Are you seriously suggesting that when Microsoft made its final offer in 2008,
Yahoo was one of "the hottest tech companies"?

~~~
paganel
Not the OP, but I remember that from a developer's perspective (mine) Yahoo
was pretty hot back in 2006-2007. Their dev center and API's were on par with
Google's, if not better, while Yahoo Pipes was a very cool and interesting
thing which has not been successfully replicated until now. Companies like FB
were cool only because they had an exponential user growth and because of the
rumors of them poaching engineers from Google or Yahoo for insane financial
packages. That started to change around 2010 I'd say, when the FB devs started
to open themselves up more to the world.

~~~
basch
who is replicating pipes?

~~~
paganel
I remember reading somth about a proof-of-concept replica of Pipes here on HN,
I might be wrong, though, can't remember the source.

~~~
basch
part of pipes was the community of work that you could clone and contribute
to. just recreating the technology isnt the same thing.

------
unchocked
I remember being shocked when Yahoo spurned MSFT's $44+ billion offer in 2008.
Goes to show, when someone offers you 11 figures for a failing company, sell
because the offers aren't going to get better.

~~~
asdfologist
People were also shocked when Zuckerberg turned down $1+ billion offers.
Hindsight is 20/20.

~~~
jaggederest
I don't know about other people, but there's a number past which I _do not
care_. N > 10^7 in my pocket after tax, I'm out, regardless of circumstances,
regardless of ability to earn more. No ragrets.

~~~
harmegido
I suspect it's not about money at a certain point.

~~~
spriggan3
It is always about the money. The more money you have the more money you need
to manage the money you already have. So it is always about the money. The
Zuck was confident his website was worth way more than a billion. that's why
he didn't sell.

~~~
mywittyname
If it was about money, he wouldn't be giving away most of his company while
trying to retain a controlling stake. The fact that he is giving away his
money suggests that he's more interested in being a successful business mogul
than he is about being "FU rich."

------
anc84
Keep your eye on
[http://tracker.archiveteam.org/](http://tracker.archiveteam.org/) to
contribute to archiving certain Yahoo assets for future generations in the
Internet Archive.

------
bogomipz
"The US telecoms giant is expected to merge Yahoo with AOL, to create a
digital group capable of taking on the likes of Google and Facebook."

Can someone explain how combining two "past their prime" entities like Yahoo
and AOL, with the Verizon telecom bureaucracy is going to produce anything
"capable of taking on the likes of Google and Facebook"?

Telecom companies have a pretty horrible culture. It is not one of innovation
or agility. They are bloated bureaucracies based on tenure and not merit. I
speak from experience. To give one small example I have have been on
conference bridges where Verizon project managers fell asleep and began
snoring. I have many more of such anecdotes with these folks. All similarly
illustrative of the culture.

~~~
ptio
Note that Verizon has a division - Product Innovation and New Business - that
is run separate from the telco business that you are mentioning.

In recent years Verizon has acquired technology companies EdgeCast Networks
(CDN) and upLynk (Video Streaming) which form the core of Verizon's Digital
Media Services [1].

Combining these assets with AOL (AdTech) and Yahoo (if the deal happens) gives
Verizon an end-to-end platform for the creation, delivery and monetization of
content (with focus on video) in the Internet.

Disclosure: I work at EdgeCast and we operate as a technology company, hate
bureaucracy and try very hard to innovate and stay agile.

[1]
[https://www.verizondigitalmedia.com/about/](https://www.verizondigitalmedia.com/about/)

~~~
tootie
Does any of that give it customers?

~~~
ptio
Hi, can you elaborate more on what you are asking?

~~~
tootie
I was being snarky. The fact that they have an end-to-end platform is great
and all, but that doesn't mean peopl will use it.

------
shmerl
Yeah, they have billions to spend on buying companies like Yahoo, but they
can't upgrade all their rotting copper to fiber optics. That's Verizon for
you.

~~~
rayiner
Any place that doesn't already have fiber within Verizon's footprint probably
can't accommodate it profitably. The margins on the places that _do_ already
have fiber are already thin. _No_ business wants to invest in new
infrastructure that isn't going to make it any money. It's not like anybody
else is chomping at the bit to build fiber in those places.

~~~
shmerl
It can accommodate it profitably. But any such undertaking is a long term
investment, and Verizon doesn't operate in such categories. They want to rip
profits faster.

Also, they have internal conflict of interests. I.e. their execs are all about
wireless, and simply don't care about landline business. Splitting it in two
could actually help, since then they'll care about improving.

 _> It's not like anybody else is chomping at the bit to build fiber in those
places._

Verizon stopped building out fiber everywhere. Only when they have a contract,
they do it (very reluctantly). Some areas are indeed less profitable because
of population density and other such factors. But others are not.

~~~
rayiner
Verizon's wireline unit is making low single digit operating profit margins
with its existing footprint. I'm pretty sure expansion into less favorable
markets would push that into the red. There is a reason Google only enters
carefully-vetted markets that waive the usual roadblocks to fiber buildout--
it's the only way to make money in the industry.

And Verizon is a public company. Investors are pushing it to ditch wireline
entirely. If the wireline unit was spun off, would those same investors
suddenly be eager to give the divested company billions to build a bunch of
marginally profitable infrastructure?

~~~
shmerl
_> Verizon's wireline unit is making low single digit operating profit margins
with its existing footprint._

Because they never cared about improving its efficiency. They actually noted,
that when they upgrade to fiber, their expenses drop. A huge drain on their
landline profits is their copper network which is falling apart. Their fiber
is profitable.

Investors want them to focus on wireless. As I said, if it would have been
split off, investors would have cared about how to improve their landline
profits.

~~~
rayiner
When Verizon replaces copper with fiber, the investment gets booked as a
capital asset, which doesn't count against profits. But any operational
savings achieved by that will goose short term profits. So if Verizon is
focused only on goosing short term profits, as you claim, they'd replace all
the copper with fiber!

More generally, Verizon is legally required to keep serving the places it
already served with copper. If it could save money by switching that with
fiber, they'd do it. You're accusing a money-grubbing big corporation of
leaving billions of dollars on the table each year.

~~~
shmerl
They would. Except they can get even more profit by investing in wireless. So
again, typical conflict of interests. Removing it could help.

Their execs indeed have no clue how to mange landline business or they simply
don't care about it. Their whole background is wireless and they are trying to
get rid of landline (selling it off).

Seidenberg was landline man through and through. He cared about improving it
and moving it forward. McAdam has no clue about it and doesn't care.

~~~
rayiner
So Verizon is too incompetent to make money on wireline so it's looking to
sell it. And Google isn't chomping at the bit to buy it because?

~~~
shmerl
_> So Verizon is too incompetent to make money on wireline so it's looking to
sell it._

Yes, or rather they aren't interested in getting that competence, because they
are too focused on wireless.

 _> And Google isn't chomping at the bit to buy it because?_

Google might at some point. They can have different reasons to wait. For
instance Verizon are still obligated to build out in some areas. Or Google
want to avoid dealing with unions and such.

------
andy_ppp
What the hell has Marissa Mayer been paid for?

Everything about this smells like Yahoo! is being run by idiot MBAs with some
spreadsheets somewhere totally misunderstanding that technology can empower
people to do fantastic things including those working within Yahoo! - instead
it's been hamstrung by each property not being held accountable to it's
competitors effectively.

I would have started competitors (startups) internally for all of Yahoo!'s key
products (buy Y.com and test them under that) and told the current product
owners if their products were not better faster than these startups could
build them they'd be replaced.

The decision to sell search because they were not able to match the investment
Google and Microsoft were putting in is another example; if you can't beat
someone financially you need to be better than them. To have just given up
based on "only" having a few billion to invest is absurd.

~~~
nikdaheratik
I don't think you can put this all on Mayer. It's basically a tug of war
between two different groups of key investors, with the concerns about the IRS
also playing a role.

One group thought that Y! had a shot at a viable business. The other group
wanted out, but didn't want to sell until they got their cut from the
Alibaba/Y!JP investments (which also propped up the stock price for the whole
thing). Mayer was hired by the first group to try and turn the tide. The
second group agreed in the hope that it would also bring the stock price up a
bit and make the non-Alibaba part of the company more valuable.

The IRS finally ruled that Yahoo can't just divest Alibaba &co. without paying
a huge bill, and Mayer hasn't been able to do anything about the rest of the
company. Which means the second group of investors is basically winning out
and spinning off all the assets so they can close out their price at the value
of the Alibaba stake and make their profit.

It's difficult to say that Mayer is 100% responsible since a good chunk of the
board/investors didn't care or were actively against her from day one. Also,
she didn't have all the tools that a turnaround CEO has at other companies
because she had to protect the share price around the value of the Alibaba
investments or that second group would simply fire her. It was always a
longshot IMO.

~~~
cstejerean
She lost support of the investors when it became clear that the turnaround
plan was a complete failure. Initially she was given a lot of latitude to make
whatever moves she deemed necessary including blowing a lot of money on failed
acquisitions and key hires that didn't work out. Now maybe Yahoo was beyond
saving, and it was going to fail anyway, but Mayer's execution didn't seem to
help it at all.

This reminds me of JC Penney, where investors also brought in an exec from
abother successful company in the hope that they could replicate that success.
In that case it was Ron Johnson from Apple, who tried to replicate Apple's
retail strategy at JC Penney with devastating results, and certainly not for
lack of being given the latitude to implement whatever changes he asked for.

The situation at Yahoo is pretty similar. I wouldn't blame the board and
investors for finally trying to cut their losses.

------
veeragoni
2 guys who spent 20 years at Yahoo, started WhatsApp and sold itself to
Facebook for $19B. and this huge company sold for 1/4th of that price.
Management vs. Product Visionaries.

~~~
Klinky
How much revenue/profit does Yahoo generate? How much does WhatsApp? Facebook
paid handsomely for a lot of hype and to gamble at poaching users.

The Yahoo deal seems way more down to Earth, compared to an astronomical offer
by a company with cash to burn and a desperate desire to keep growth going up.

~~~
cdmckay
Facebook buying WhatsApp could also be seen as a defensive purchase (i.e.
prevent Google or MS from buying up the users).

~~~
mywittyname
Facebook realizes that it's smarter to be a communication company rather than
a communication platform. Brand management is a key to P&G's success, and
Facebook is smart to emulate this in the tech. sector.

------
aceperry
I hope yahoo mail sticks around. I've been using it since forever, and would
hate to change to gmail. Yahoo mail is kind of slow, but gets the job done,
gmail is too chaotic for me. Maybe I'm old school about that, but I'm all in
on yahoo mail.

~~~
mdonahoe
I didn't believe you that Gmail was more chaotic than Yahoo, so I signed into
my never-used yahoo account.

The Yahoo Mail interface is much cleaner than I remember, though I don't enjoy
the purple theme, the loading times, and the persistent "Try Firefox" banner
in the top right.

Plus my mailbox is full of spam from Yahoo itself, like weekly emails from
Yahoo Movies.

~~~
Grue3
>the persistent "Try Firefox" banner in the top right

We, non-Chrome users, hate persistent "try Google Chrome" banners on every
Google property too.

------
harshreality
I'm curious how this will play out for AT&T internet customers, given that
their email is currently hosted by Yahoo. Is Verizon going to host their
competitor's customers' email?

~~~
gcb0
if att has a contract with yahoo and yahoo doesn't file for bankruptcy, it
will have to continue to provide support or pay the contract cancellation.

... or, now it being Verizon, they will just drip one email per day into the
inbox and say that they only advertised up to 100% of email, but that the
contract only really guarantees 0.01% of the advertised speed.

------
doppp
Can someone change the title to include the fact that this purchase is for the
search and advertising operations part of Yahoo? Everyone here thinks it's for
the entirety of Yahoo. It's like they didn't bother to read the article.

~~~
gaur
Maybe someone could remove those 'distracting, unnecessary quotation marks' as
well.

I think the BBC somehow thinks they're being ultraprecise by putting quotation
marks around certain words, but it's just obnoxious.

~~~
Doctor_Fegg
It's just to indicate reported speech: "this isn't confirmed fact, it's
something we've been told". Absolutely standard journalistic practice.

~~~
gaur
At one point, the headline was changed to read "Syrian migrant 'behind German
blast'". But at that point, the fact that there was a German blast was widely
known; the unconfirmed portion was that a Syrian migrant was behind it.

So if anything, the headline should have been written "'Syrian migrant' behind
German blast". But the BBC didn't do that, because all indications are that
BBC journalists pepper their headlines randomly with quotation marks.

Randomly peppering headlines with quotation marks absolutely is not standard
practice. Most American newspapers don't do it.

~~~
Doctor_Fegg
Ok, absolutely standard British journalistic practice then, where the BBC (and
I) come from.

------
empath75
I wonder if Verizon worked out a deal with the mozilla foundation over the
search bar exit clause? That's basically a billion dollar pay out over 3 years
if Mozilla decides to trigger it.

------
Grue3
That seems incredibly cheap, when stuff like LinkedIn, Snapchat, Twitter and
so on having bigger valuations, despite being just as unprofitable.

~~~
mason55
One of the keys to having a valuation that's higher than your discounted cash
flow is whether or not people think you can grow. Twitter, LinkedIn and
Snapchat are all growth-stage companies so there is less relation between
their valuation and the sum of their assets. Yahoo! is much closer to a mature
company so their valuation is better determined by a sum of assets minus
liabilities.

With LinkedIn you had an obvious path to continue growing as well as a pretty
obvious path to profitability whenever they decided to stop growing.

Snapchat actually has pretty big growth prospects and has shown that they can
monetize very well, so they can command a much higher multiple of their
current earnings.

Twitter's market cap is just over 2x what Yahoo! sold for, so it's not like
people think they are THAT much more valuable, and their stock has taken quite
a beating over the last year because they're showing that they don't have a
path to growth.

------
Ping938
Here is math for people wondering about price of Yahoo:

Y! market cap is $36.38b. Have in mind that Y! is selling only its core biz so
we would have to subtract values of Y! shares in Alibaba and Y!Japan, which
are worth $33.74b and $8.56b respectively. However thats pre-tax and Y! could
not get that money for them. There for adjusted values (-38% tax)are $21b and
$5.4b again respectively. There are also cash & marketable securities worth
$6.8b and convertible debt of $1.4b.

So final math looks like this: $36.38b-$21b-$5.4b-$6.38b-(-$1.4b)=$5b

~~~
profeta
why do people keep bringing up the alibaba and other assets when discussing
the market cap?

this is like buying someone body shop, looking at the body shop revenue, and
then subtracting the price of the current owner paid-for porsche.

~~~
mywittyname
Because Yahoo owns $30B+ worth of Alibaba stock.

To use your analogy, it's like buying a body shop, but subtracting the
$10,000,000 in real estate they own because it's not included in the sale.

------
Esau
"US telecoms giant Verizon Communications is to buy Yahoo's search and
advertising operations"

First, I was surprised to see search operations mentioned, since they farmer
that out to Microsoft. Second, if this is only search and advertising, I
wonder what will happen to things like Flickr and Tumblr.

It should be interesting to see what is actually in the announcement.

------
xorcist
It used to be said that Yahoo is where startups go to die. With AOL and Yahoo,
is Verizon now where IT companies go to die?

------
randomname2
YHOO used to be valued at $112B at its peak.

~~~
kennywinker
It's turns out valuations are imaginary numbers that mean nothing?

I once sold a $1 beer to a friend for $2. Let's back-of-the envelope that:

100% markup, $1 profit. If I buy and sell 1 billion beers per year, that's a
profit of $1B/year. Ok, so given a 5 year return on investment, that means my
beer business is valued at $5 billion.

Nice! Anybody interested in investing please get in touch I'm raising a series
A.

~~~
coldtea
> _I once sold a $1 beer to a friend for $2. Let 's back-of-the envelope that:
> 100% markup, $1 profit. If I buy and sell 1 billion beers per year, that's a
> profit of $1B/year. Ok, so given a 5 year return on investment, that means
> my beer business is valued at $5 billion._

And if you've convinced enough people that this is the case, so you get at
least a few million dollars in investment, that would mean your company indeed
has some value.

But selling $1 of beer of $2 to a friend once never got anybody anywhere.

You seem to conflate what happens in micro-micro-scale with what should be
shown to be able to happen in the macro-world, for a valuation like $5 billion
to start involving people investing lots of real money.

In other words, sure, valuations are based on extrapolation, but it's BS to
think they're the same as (or based on) any small-scale extrapolation of an
statistically insignificant transation (selling $2 worth of beer).

When the volume/sales/eyeballs/etc get so many that people start actually
investing big money according to a large-sh valuation, the company has already
passed a lot of basic tests...

~~~
kennywinker
I was being facetious. My point was to deminstrate a business that is clearly
not worth 5b, but calculate myself a $5b valuation. Most real workd examples
are more grounded than mine but still these are imaginary numbers.

------
kmfrk
While Flickr has decent export tools (you just get your photos without tags,
descriptions - literally anything else), Tumblr's have always been non-
existent aside from an unofficial, macOS-only tool by Marco whose download
link ([https://marco.org/2009/12/10/the-tumblr-backup-app-is-
ready-...](https://marco.org/2009/12/10/the-tumblr-backup-app-is-ready-for-
its-first-beta)) no longer works.

Anyone recommend a Tumblr export tool? The best, as far as I can tell, is
jekyll-import
([http://import.jekyllrb.com/docs/tumblr/](http://import.jekyllrb.com/docs/tumblr/)),
but I'm running into errors and getting weird results.

~~~
davidgerard
Wordpress's Tumblr importer reputedly works pretty well. YMMV and test first,
of course.

------
pasbesoin
Off-the-cuff sentiment:

Axis of... something.

As a Verizon (now, specifically Wireless) customer, I've watched things go
from "worth the price" to "what am I paying for?".

And Yahoo. Once proud, pioneering Yahoo.

And the remains of AOL are in the mix, as well?

I mostly feel this is somehow primarily going to shovel more crap at me.

------
jlgaddis
A fair amount of FreeBSD's infrastructure in hosted in Yahoo!'s datacenter in
Santa Clara.

I'm curious how this will affect that relationship, if at all. It's not like
Yahoo! is going to stop using FreeBSD overnight or anything but Verizon may
decide they don't want third-party infrastructure in "their" datacenter.

------
mirkules
Every time I hear about Yahoo these days, I am reminded of the movie
Frequency. At the end of the movie, the protagonist is driving a fancy
mercedes with "YAHOO" as the license plate, implying investments in Yahoo made
him rich. How ironic that since the movie came out, Yahoo started its decline.

[http://www.rexblog.com/2012/05/13/47671](http://www.rexblog.com/2012/05/13/47671)

------
orionblastar
Basically everything Yahoo tried to do basically failed to earn income, and
Google came along and did those things better.

Verizon can get more users from Yahoo and merge them with their AOL users. No
doubt this bigger user base can be sold advertising to earn more money.

Firefox stopped supporting Google searches and switched me to Yahoo, will this
Yahoo change no longer support Mozilla and be taken off the list?

~~~
bogomipz
Who are the AOL users? Are these folks in rural areas out of the reach of
broadband? I've heard that there are still dial up users. This however would
be odd with Verizon business plans as they have been divesting themselves of
copper plant.

~~~
sethammons
I know two people who are now on Verizon Fios and still start up their
internet by going to AOL.com... They are about as far from a technical user as
you can get.

------
josh-wrale
What is likely to happen to shareholders of YHOO?

~~~
harryh
They will receive about $5.27[1] per share of YHOO stock they hold (or perhaps
an equivalent amount of verizon stock if they do the deal that way) in
exchange for the portion of the business being sold. Perhaps a bit less than
this if there are transaction fees or taxes that must be paid.

They will then continue to hold their Yahoo shares which will represent their
holdings in Alibaba and Yahoo Japan as well as Yahoo's patent portfolio.

1\. $5B / 948.25M outstanding shares ~= $5.27 per share.

~~~
kennywinker
Wait?! is that really how this works? What if people want to keep owning the
online part of the business? Are they hooped? Seems like you could really
royally screw shareholders like that (i.e. sell all the good parts and leave
shareholders holding the bad parts).

Their share price is about 39 USD right now, that means they sold off a huge
chunk of the biz for 13% (5.27/39.38 = 0.1338) of the stock's current
valuation, right?

Forgive my incredulity, I genuinely didn't know how this kind of thing worked.

~~~
henrikschroder
Deals like this are made by the board of directors, who represent the
shareholders and have a fiduciary duty to them, as well as being shareholders
themselves. So that's your guarantee of it not being a crap deal.

If you do a sum-of-the-parts valuation of Yahoo, you can end up seeing that
the core business has a negative value. So holders of YHOO will trade
something worth -1$bn for $5bn in cash, that's a pretty good deal.

~~~
martinza
Sum of parts for yahoo is a terrible way to calculate it's actual value. If
you look at the balance sheet you'll see billions in deferred taxes. That
relates directly towards selling alibaba and yahoo Japan in the open market.
The play on yahoo now will be is if yahoo board members can save money on
those taxes. If you think they can, you win. If not, stock is trading roughly
around the fair price.

------
simulate
Yahoo retains a market cap of $36 billion. The reason Verizon paid only $5
billion is that Yahoo Japan and Alibaba are not part of the deal.

> Yahoo owns about 35 percent of Yahoo Japan and 15 percent of Alibaba, two
> overseas companies that have long dwarfed Yahoo in size.

------
forgotpwtomain
So less than 1/5 of a linkedin. Is Yahoo's core business really that bad?

~~~
iends
What is Yahoo's core business these days?

~~~
fullshark
Sounds like the core business is actually "Owner of Alibaba stock".

------
dghughes
The oil trader folks are going to be miffed, did Yahoo! Chat get axed in the
deal?

[https://news.ycombinator.com/item?id=11826186](https://news.ycombinator.com/item?id=11826186)

------
SCAQTony
S __T — that is so going to mess up my AT &T email with Yahoo. Both my AT&T
account and Yahoo email are intertwined.

~~~
orionblastar
Me too and my entire family has SBC/ATT email accounts.

Will it stay like the Rocketmail accounts did, or will they turn off service
for legacy email to save money?

------
joering2
Shouldn't it be banned? Like car factory owning dealerships? Or Movie Theaters
owning Hollywood Studios??

~~~
briandh
> Or Movie Theaters owning Hollywood Studios??

Wanda Group, majority owner of AMC Theatres, also owns Legendary
Entertainment. And AMC Theatres and Regal Entertainment Group co-own Open Road
Films.

Stepping back in time, infamous low-budget studio Cannon Films owned hundreds
of theaters.

> Like car factory owning dealerships?

Plenty of folks think that would be a good thing, e.g., [1] [2]

[1] [https://www.justice.gov/atr/economic-effects-state-bans-
dire...](https://www.justice.gov/atr/economic-effects-state-bans-direct-
manufacturer-sales-car-buyers)

[2] [https://www.ftc.gov/news-events/blogs/competition-
matters/20...](https://www.ftc.gov/news-events/blogs/competition-
matters/2015/05/direct-consumer-auto-sales-its-not-just-about-tesla)

~~~
pacofvf
In my country, Car makers own dealerships, well actually only a small number
of them, most Dealerships are franchises, so we have a mixed model that works
pretty great for all involved. New makers that arrive to my country expand
with their own dealerships, and after they gain traction they start to sell
franchises, when well stablished car makers want to expand to new markets they
usually do it with their own dealerships too.

------
fractal618
How does this effect DuckDuckGo who just partnered with Yahoo??

Does Verizon share the same values as duckduckgo?

------
discardorama
If you're a current $YHOO shareholder, what does this deal mean for you?

------
rekshaw
can someone explain why yahoo is worth a penny?

~~~
karma_vaccum123
Trailing-edge users.

Trailing-edge users are those people we might otherwise make fun of, but they
don't run adblockers and they don't constantly question the services they use.
These people have used Yahoo Mail for a decade and will continue to for the
rest of their lives.

------
bitmapbrother
Note: this acquisition does not include their $30+ Billion USD worth of shares
in Alibaba and their stake in Yahoo Japan which is about $12 Billion USD.

~~~
TylerE
What's the deal with that? How is Yahoo Japan worse $7B more than Yahoo Rest-
of-World?

~~~
phamilton
Yahoo Japan is an entirely separate company. It's actually an e-commerce
platform closer to Amazon than Yahoo proper. Yahoo just has an investment and
a cobranding agreement. Otherwise it's entirely separate.

------
smegel
This sounds a lot like News Corp's purchase of MySpace back in 2005.

------
jjawssd
5 billion dollars down the drain! Yahoo has excellent negotiators I must say!

------
HoopleHead
I misread that on my phone's tiny screen as a "$4,88" deal. Even then I
thought it was a lot to pay for... er... whatever it is that Yahoo does these
days.

------
protomyth
Mods: What was with all the other submissions being marked DUP?

~~~
slater
They're ... duplicates...?

~~~
protomyth
They weren't at the time, someone was marking all the early submissions then
putting a link to a two day old thread. It looked like someone was picking
what source would make the front page.

