In 1997, Yahoo had the glorious opportunity to buy Google for a paltry $1million dollars but refused.
OPINION: Although, the Ghanaian business scene may not experience such high-calibre takeovers, Yahoo’s mistakes are possible pointers for local businesses.
For starters, Yahoo and its shareholders failed to know “when to walk away “ in proverbial Kenny Roggers 'Gambler- style', that they held on too long that they lost the opportunity to sell out at a price ten times higher than the $4.8 billion paid by Verizon.
In 1997, Yahoo had the glorious opportunity to buy Google for a paltry $1million dollars but refused. Their excuse was that yahoo was set up to answer questions to search inquiries rather than direct user to other sites who had answers to the questions, as Google was doing.
So Yahoo passed up the opportunity to acquire Google just because they underestimated the value of search.
Yahoo in 2006 had the world spellbound when they were on the verge of acquiring social media giant Facebook. Just as in the case of Google, Yahoo failed to look past the 250,000 dollar more share value Mark Zuckerberg was asking for, that they sadly passed up the chance to acquire Facebook at a paltry 1 billion dollars.
It was a cold winter’s night in 2008, and guess what? Yahoo blew it again! Here was $44 billion dollars on the table for a company whose influence was being diminished by Google, and yet they refused to sell. Talk about an inflated sense of worth. Yahoo challenged the assessment by industry players that “Its business value was deteriorating”, as reported by the New York Times.
They failed to read the trends correctly
For a technology company, Yahoo has been very bad at reading the trends and riding on them. That is certainly not techy enough.
They underestimated the power of search engines as operated by Google. In that, they did not realize that only a few people would be interested in reading the average person’s solution to a search enquiry, as they would a direction to an expert site for credible proven information.
They tried to force themselves on the customer
From the cases identified above, Yahoo was not ready to adapt to the changing needs of the customers. They had an idea of what they wanted to be, and stubbornly stuck to that, even when the users had expressed what they actually wanted. An example of this weakness was when Yahoo failed to turn Flickr into a social networking site, when clearly that was what the people wanted. Yahoo stuck to their goal of using Flikr as picture ownership tool. Today Instagram has capitalised on the needs of the people to build a successful social marketing business, showing Yahoo what they missed out on.
A poor evaluation and sense of self-worth
Yahoo did not know their value, efficient and effective projection of their brand in the future. This ignorance caused them 40 billion dollars when they passed up the chance of selling to Microsoft, only to take a buyout amount of 4.4billion dollars.