Why did Yahoo and other companies collapse?

Yesterday, the world was trading news, which is the acquisition by Verizon of the Internet sector in Yahoo for $ 4.8 billion. The news was shocking, as the giant company was sold for an amount that would not buy a third of the WhatsApp application. Yahoo, which was valued at over $ 100 billion in the past, sold all sectors of the internet for a pittance. What is the secret of the collapse of Yahoo and how can we benefit from it?

In the beginning, and to clarify, the deal is to buy the Internet sector, whether the search engine, mail, services and applications, as well as other subsidiaries of Yahoo. But it is not a complete purchase. Yahoo's market value is $ 36 billion. If you are wondering where the other 31 billion are, the answer is in the Chinese dragon "Alibaba", of which Yahoo owns a 15% share, and the value of Alibaba today is 207 billion, meaning Yahoo's share is $ 31 billion. In other words, the deal is to sell everything owned by Yahoo, but there remains an investment entity that will manage the company's investments in Alibaba and others. Back to our story here, which is what happened to Yahoo?

Failed acquisitions

Hiring a skilled employee but you don't need one enumerates a failed decision. Hiring a failed employee in an important sector is also a failed decision. This is a summary of Yahoo's investments and acquisitions. Looking at the history of Yahoo, you will find this matter, starting with failed deals or sums in their value, such as ...

Broadcast.com, which was bought in 1999 for $ 5.7 billion, this site was internet radio. Imagine that Yahoo valued the user at $ 10. Yes, a site with 570 users sold at $ 5.7 billion, and it was a financial disaster and failed to bring in any money. This site ended and Yahoo modified its service several times, the latest of which was its conversion to become a so-called Yahoo Music Radio. But the bottom line was that you have a company that you don't know how to benefit from.

Reverse example They were successful failed models such as Flickr and Tumblr… Successful we mean that these sites are really useful and have their users. But the deals are also at a high price, such as Tumblr. Yahoo doesn't have a plan how to take advantage of them and generate revenue. Consequently, the transaction became an additional cost and a waste of the company’s money.

Acquisitions not made

At a time when Yahoo wasted billions on futile deals. The company escaped two deals. Do you know what they are ?! They are Google and Facebook.

1

Google: The two guys, Larry and Sergey, had a project called "Google", which is a search engine. The two friends began to search for funding and from the parties to which they sought refuge, as reported by Yahoo ... Yes, they asked Yahoo to finance their "Google" project and to have a stake in it, but Yahoo thought that this idea was not appropriate :). The matter did not stop at this, but in 2002, that is, after only 4 years, there was a new opportunity to buy Google for $ 5 billion ... At that time, Yahoo was suffering from a financial crisis, but it was able to obtain bank financing and acquire Google completely. But Terry Semel, president of Yahoo, believed that Google was not worth the amount requested (some foreign websites describe Terry as having failed a CEO in technology history because of his strange decisions). In summary, there were two opportunities, once to invest in Google and once to buy it, but Yahoo preferred not to do so.

2

FacebookThe same thing happened with Google, and it was repeated with Facebook. Mark Zuckerberg and his four partners (yes, Mark has 4 co-founders with him) founded Facebook in 2004 and the site started to achieve fame and after two years, that is, in 2006, newspapers reported that Mark asked for $ 1 billion, but the Yahoo team led by the genius destructive Terry CEO (who did not buy Google) Opinion reduced the amount to $ 850 million and the deal fell through.

The era of smartphones and connectivity

Yahoo continued its strange confusion and incomprehensible decisions, some of which make you feel that the leadership was far from reality. With the launch of smartphones, we found Yahoo absent from them. We did not think of introducing an operating system - even if this was difficult - or multiple applications at the beginning. Quite simply, she let this era pass ahead of her ... Then, with the outbreak of the chatting apps craze in the last 5 years, we find Yahoo again making an incomprehensible step. It was decided not to apply the Yahoo chat app, which was overwhelmingly popular at the end of the last decade, and the leadership completed this matter and decided to close group chat rooms in 2012. Yes, at a time when the world is heading towards phones and chat applications, Yahoo decided to leave this world.

We don't care about the user

The capital of any company in the world is its users. This is logical and understandable to everyone except for the successive Yahoo leaderships, headed by Terry Samuel, who did not care what the user wanted, such as:

1

Agreement with the Chinese government On granting information. When China pressured companies to access some data and monitor users, the companies refused, including Google, which led to it being blocked and even Facebook blocked. Yahoo decided to agree and agree with China. With this it gained its presence in China but lost the user's confidence.

2

E-mail: Yahoo users suffered from annoying "spam" advertising messages, but the company did not care, saying that its competitor at the time "Hotmail" is also suffering from the same thing as if the rule is not to offer the right thing but because you are better than others. So, when Google introduced Gmail, which was mainly based on blocking "spam", Yahoo and Microsoft also lost many users to Google, leaving them with a problem without treatment.

3

Close services: In the era of Marisa (the next point), Google began restructuring and reforming strongly, but unfortunately, there were violent decisions to close services that caused the company to lose many of its fans.

The era of Marisa Mayer

In 2012, the founders of Yahoo, as well as the investors, thought that the company was going in an incorrect way and decided a different thing, which is a leadership from the competitor Google. Indeed, Marisa Meyer was appointed as the famous Google leader and employee No. 20 in it and one of those responsible for creating a lot of services. The search engine, pictures, news, maps, books and Gmail were among the Individuals responsible for Google AdWords claims. Marisa, when she came, announced the new era, and its summary was the closure of all services, websites, applications, and any point that does not achieve profits or does not have a profit plan. It was great in terms of reducing costs, but unfortunately, this procedure was carried out violently and anything that was not profitable was closed, which made us say goodbye to things such as a written blog. The second axis that Marisa worked on was to stop trying to challenge Google "her old company". Via Yahoo, she will not be able to make her search engine outperform Google. So, let us present various things, such as the agreement with Microsoft and Dropbox to provide services to its customers, as it sought to hire a lot of new employees and pay attention to smart phone applications. Indeed, Marisa succeeded in this matter and the share price rose from $ 16 to $ 36 (part of this increase is due to Ali Bab's successes).

Despite Marisa's success, there was a problem with the new proceeds. Marisa's main approach was to reduce expenses to less than revenue and thus profit the company. But Yahoo has not yet managed 4 years for Marisa to return as a true competitor in the market. Rather, Marisa also achieved what the previous ones were doing and wasted money buying Tumblr and did not profit from it.

Conclusion

Whoever reads the lines at the top will say, "Oh Bin Sami, you mentioned that you will say the secret of the companies' failure, and then you only talked about Yahoo?" The answer is this is true. I mentioned the secret of Yahoo's failure, but I am looking for any company that collapsed and failed and you will find the same points achieved ... Do you see that Yahoo failed because it did not match the market? How about Nokia? The same thing happened when Andy Robin offered her to adopt Android, and they refused ... Do you want an example of a company that offered her a revolutionary genius idea and ignored it ?! Here's a Western Union money transfer company. When Graham Bell offered to buy them the phone, they mocked him and told who would like to hear someone else's voice in your game. We make fun of Yahoo for not buying Google, so what about someone who refuses to buy the idea of ​​phones ?! Now Western is only in the money transfer business, which is worth $ 10 billion, while AT&T (the company that bought Graham Bell Phones) is now worth $ 265 billion. You will find the mistakes made by Yahoo in any company that fails and we hear it sold or bankrupt. Just change the names, but the idea comes true.

The magic formula for failure is:

1

It does not offer anything that keeps pace with the changes of the times and has continued on previous illusions of power, as Nokia did with Android and Yahoo with its competitors.

2

Don't invest your money in developing the business itself and your employees (Yahoo lost hundreds of employees to its competitors).

3

Do not study the direction of your company, is it up or down, and continue to be stubborn as you are progressing (is it possible that Terry will continue to lead Yahoo for 6 years ?!).

4

Do not try to find out where the defect is to correct it, but rather compare yourself to others less than you to feel that you are better (as happened in Yahoo Mail).

5

Do not think about diversifying the sources of your profits. When your sector fails, do not think what the problem is, because the final outcome is that you are an overall winner (as you relied on Yahoo on Alibaba's successes and investments in it).

6

Do not think logically, but continue to be stubborn that a certain point will win (as happened with Yahoo, which continued to spend in the search in the hope of defeating Google and was able to excel in other things).

7

Do not be interested in the services that your followers prefer and delete them or not develop them under the pretext that they do not make a return, but they will lose your name and your popularity (as we saw with Yahoo in stopping services).

8

Late risk: one of the reasons for success is to take risks and introduce new things. Yahoo has been for years and still today offers the same as it did a decade ago. When they reached a complete meltdown in 2012 they decided to change style and hire Marisa who was daring to take risks. Unfortunately, the steps came too late and failed to save the company.

Sources:

wikipedia | ecosultancy | Techcrunch