Is Yahoo A Declining Internet Giant?

marissa-mayerWhat is happening to Yahoo? The 90’s saw a boom in technology with the advent of Yahoo and its internet services like communication platforms, internet search, and digital content. Let’s understand how Yahoo splits the business. The original Content is delivered through Yahoo.com. Yahoo mail is used for digital communication. Flickr and Tumblr provide advertising platforms. The Company has also invested stakes in Alibaba Group, a Chinese e-commerce company, and also in the internet company Yahoo Japan.

From being an internet giant once, how did the company reach a stage where its core value is negative? Since 2008, there has been a steady decline in sales. The decision by CEO Marissa Mayer to buy unprofitable startups for oversized valuations also proved to be a disaster.

· Tumblr for $1.1 billion
· BrightRoll for $640 million
· Flurry for $240 million
· Qwiki for $50 million

yahoo-300x200Take a look at some Figures

Yahoo has bought 384 million shares of Alibaba (15.4% of this company) and the value comes to around $32 billion.
Yahoo has invested 35.5% equity interest in Yahoo Japan, which is worth about $8.5 billion
However, Yahoo’s total market capital is less than the $40.5 billion.
This shows that on a balance sheet, the core business value is less than zero.

So it’s evident that it’s high time CEO Mayer steers the company onto the positive scale again.

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