The Fruits of Civilization (26-9-6) Yahoo!


AOL was only the fattest dot-com company that survived the bubble to face inevitable decline. There were others, leaner but not meaner in the marketplace.

Yahoo! was another early Web portal that lost its footing in much the same way that AOL did: lack of vision and sense of reality coupled to not having any technical edge.

Taiwanese-born American entrepreneur Jerry Yang, CEO of Yahoo!, shortsightedly spurned acquisition offers by Microsoft after the dot-com crash, and again in early 2008 (for $44.6 billion; a 61% premium on Yahoo’s stock price at the time). Yahoo! had a presence in advertising services that Microsoft wanted.

Yang was booted out of his post shortly after spurning Microsoft’s generous 2008 offer, whereupon Yahoo! continued its drawn-out demise on its lonesome.

Yahoo! users and consumers were subjected to all the indignities of the digital age. Their emails were illicitly snooped by the government and their accounts hacked. Further, anyone who clicked on a Yahoo!-sponsored ad might be in for an unpleasant surprise, as those had been infected with malware. Yahoo! was less a service provider than a portal of pestilence.

Finally, in 2016, Yahoo! pulled the plug by selling itself to Verizon for $4.83 billion. Its last CEO, Marissa Mayer, having failed at the task of turning the company, threw in the towel. For her pains, after sucking out $161 million for aimlessly running the company for 4 years, Mayer walked away with a $57 million severance package. It was a rich goodbye, altogether typical of executive “golden parachutes.” But the alternative of not selling out would have been further value erosion for shareholders.

Yahoo!’s buyer, Verizon, started life as a Baby Bell when AT&T was insensibly broken up by the US government, rather than rationally regulate the natural monopoly. In the mid-2010s Verizon evolved into a high-tech scavenger with no business sense: buying the decaying husks of AOL and Yahoo!.