[super_sloth]

To be fair, the market put such a small premium on the non-Alibaba value in Yahoo largely because they weren't confident that Yahoo wouldn't just squander it.

Yahoo's purchase of Tumblr for nearly a billion dollars is a great example. That asset will likely never give Yahoo a return.

[kansface]

Yahoo's stock is valued far less than the sum of its assets. That is quite a lack of confidence.

[yabatopia]

That's because investors look at Yahoo as a holding company, with 3 main components : Alibaba, Yahoo Japan and Yahoo (USA/Rest of World). It's quite normal that the value of the holding company is (far) below the sum of its parts. There are multiple reasons for this discount: assets are less liquid, overhead costs, management risks, taxes, etc.

[dragonwriter]

> Yahoo's stock is valued far less than the sum of its assets. That is quite a lack of confidence.

The value of any business entity with non-zero liabilities is less than the sum of its assets. That's just finance 101.

[seanflyon]

Most companies have value that would not count as "assets"

[dragonwriter]

Most company have intangible assets and/or liabilities whose valuation is less-than-concrete that aren't traditionally reflected on a balance sheet except when they are given a concrete valuation as "goodwill" in the event of acquisition of the company.

These assets and liabilities exist all the time, though. In the case of a publicly traded company where the market cap is substantially less than the book value -- concrete assets less concrete liabilities -- there is a judgement that these fuzzy assets and liabilities aggregate to a net liability. That's a sign of perceived distress, but not really rare.

Its even less rare for a company to be valued less than its (concrete) assets -- this is fairly normal. That just means that the net positive goodwill is less than concrete liabilities.

[gcb0]

only if count the assets (i.e. stocks) at face value.

if you did that, you can just go to any stock market and buy any stock. any. without ever even knowing which company they are for. it is the same reasoning. If you think yahoo has 50b in cash because it has stock of other companies valued at 50b, you can just buy 50b of any company and you will have 50b? probably you are going to have 50b-+(market fluctuation) which is what nobody wants to bet on so easily.

only you and icann reason like that :)

[pstuart]

Are there any Yahoo acquisitions that haven't been complete disasters?

[scott_karana]

Flickr and Tumblr haven't been disasters (yet) for users, at least... :)

[yuhong]

Tumblr was acquired after Marissa Mayer became CEO and one of her goals was to improve acquisitions.

[ceejayoz]

Flickr stagnated for nearly a decade post-acquisition.

[dcole2929]

it's ironic because technically Yahoo and their acquisitions are sound. Flickr is still one of the best looking photo sites around, and from what I hear from my Photography friends performs like a champ. Tumblr likewise is a good technological investment. I think the failure has been turning good technology into money, which is where a lot of companies fail. The beauty of Flickr and Tumblr are ruined as soon as you start heaping crap tons of banner ads on every page. But that said you still have to find a way to generate revenue from those investments.

[vidoc]

The acquisition of broadcast.com for 5.7B.

That's an expensive domain name but the redirect works :P

[coralreef]

Mostly paid in stock

[rdl]

Overture.

Which was kind of like "PayPal buying eBay" in terms of Yahoo!'s core business, but didn't go far enough.

[gcb0]

overture succeed in it made google buy much larger , i.e. more expensive when summed, competitors overseas to keep up :D

[rokhayakebe]

What are the complete disasters and how did you come to the conclusion that they weren't worth the price they paid?

Genuinely curious.

[nullrouted]

Broadcast.com

http://en.wikipedia.org/wiki/Broadcast.com

Made Mark Cuban some money but it never turned a profit for Yahoo and they don't have anything in that space anymore.

You can look at the entire list here:

http://en.wikipedia.org/wiki/List_of_mergers_and_acquisition...!

A couple of others that stand out: GeoCities, Zimbra (Yahoo bought it for $350 Mil, sold it to VMware for less who sold it down the road as well), etc.

[kenrikm]

Well not all the acquisitions were bad.. ViaWeb ;-)

[shenoyroopesh]

Flurry. Another acquisition that continues to lose money.

[albertwang]

brightroll