There’s a reason why mothers shouldn’t judge their children in beauty pageants, why chefs rarely run the business side of restaurants successfully, and why Steve Jobs had to be fired and rehired before making Apple the biggest tech company in the world. Pride and prejudice get in the way of sound decisions sometimes, and when Yahoo didn’t take the $44.6 billion offer from Microsoft in February, 2008, many people pointed to co-founder Jerry Yang as the reason they hesitated and eventually lost the opportunity.
As Yang himself said, the consolation prize of working out a search deal with Microsoft “hasn’t gone the way they wanted.”
As Microsoft CEO Steve Ballmer said the day before Yang’s statement, “Sometimes you’re lucky.”
Yang resigned from the board of directors earlier this year.
The week that Microsoft offered $31 a share to Yahoo, the stock was valued at $29.20, making it a favorable offer to many. Since the beginning of 2009 months after it was clear that Microsoft nor anyone else was going to buy the struggling company, Yahoo shares have not broken $19 and currently hover around $15.
Their Market Cap is $19.17 billion, making it nearly impossible that they would ever get within $25 billion of the offer that Microsoft made if they were able to find a suitable buyer. It was a huge opportunity lost. The chef was running the restaurant.
Here’s a graphic that demonstrates just how quickly Yahoo has plummeted and pointing to a potential bust in the near future. If it happens, this may indeed be the biggest business blunder in tech history. They’re not the first online empire to fall, but they passed up on a lot of money going in.
- How Microsoft learned to love the outsiders (tech.fortune.cnn.com)
- Microsoft’s partnership strategy: we’ll take what we can get (gigaom.com)
- Will Microsoft Dump Bing? (pcmag.com)
- Has Steve Ballmer Fixed Microsoft? (channel-buzz.com)
- Yahoo co-founder Jerry Yang resigns from Web giant (news.cnet.com)