Category Archives: Yahoo

Yahoo Adds Tumblr As Sale Draws Closer

Tumblr Added to Yahoo as a Sale Gets Closer

Yahoo may soon find itself no longer operating as an independent company.

Even though the company may not be an independent public company for a lot longer, that didn’t stop the website from releasing the results of their second quarter earnings. Most people watching the industry assumed that their results would be down for the quarter, proving that Yahoo was going into decline more and more. As of this year, Yahoo has earned a total revenue of $1.31 billion, up from $1.08 billion the year before.

With all of this in mind, the career of CEO Marissa Mayer is not as important as figuring out what Yahoo’s core business sale process is looking like, though many reports are implying that Yahoo is narrowing down its final bids from companies such as Verizon. Verizon is actually supposed to be the frontrunner for companies taking over Yahoo, after buying out AOL much earlier on. Verizon has also bought several other private equity firms from other billionaire backed groups, including ones run by Dan Gilbert and Warren Buffett.

When asked about Yahoo, Mayer herself stated that the company is making progress for the 2016 year and has meet expectations for the second quarter with the help of strong disciplined management. She also added that the board has also made a lot of progress in finding strategic alternatives in addition to putting in the extra effort to improve the overall quality of the operating business.

The Possible Cost of Buying Yahoo

Buying Yahoo and Paying Mozilla Billions for Nothing A Possibility

In 2014, Yahoo and Mozilla made a deal that allowed Mozilla to become the default search engine for Firefox browsers in the United States.

The deal cost Yahoo a grand total of $375 million when it went through in 2015 and was meant to help Yahoo compete with Google as a way to expand its market and act as a search engine hub. On paper this sounds like a very beneficial deal but now that Yahoo is up for sale, anyone who may want to buy the company may want to have second thoughts because this deal could backfire in a fascinating way.

The Yahoo-Mozilla agree has a hidden clause that allows Mozilla to back out of the deal while still getting paid their $375 million every year up until 2019, provided the company is bought out. The clause states that Mozilla has the right to distance itself from the partnership if they feel their new partner is unacceptable for the company to do business with. This basically means that Mozilla can find a new partner to strike a deal with if they don’t like the current one and Yahoo would still be stuck paying them over one billion for the next few years.

This clause would be something a potential buyer for Yahoo would have to seriously take into account since it would prove to be incredibly costly for a buyer if Mozilla has a sudden change of heart.