The bigger story is they're getting rid of 44,000 employees (nearly a third of their workforce), with the first 10,000 taking voluntary buyouts right now. That's after a $4.5 Billion tax cut. Rather than invest in those engineers, they're outsourcing to offshore IT.
periodic reminder: if your employer (especially your private sector, non-union employer) offers you a buyout? Jump on it.
After the first round of layoffs, there's a lot more stress, and the severance, almost without exception is a lot less generous for the second round of layoffs. Take the package; find a new job.
> Verizon said it would also cut 10,400 jobs through voluntary buyouts — a 6.8 percent reduction in its workforce that will cost the company as much as $2.1 billion in severance charges.
Surely this doesn’t mean that each employee who leaves gets to pocket an average of $200,000, right? But where else would this money go?
My father received ~1 month for every year of work at Kodak in severance, when he was laid off. I'd be surprised if a lot of those employees didn't have similar contracts.
Seems like this is more up to the company and its ability to provide such things rather than being in any explicit contract. What if they're unable to fulfill such obligations?
The offered the buyout to 44K people and 10.4K got the deal, but they said the declined the application of about 10% of the people who applied. Interesting.
Profit maximization is a basic tenet of capitalism. Verizon serves their shareholders not a country. The alternative is to turn Verizon into a state owned company like Huawei.
Verizon and others of its ilk have worked hard to convince people that cutting its taxes would help its employees and the country as a whole, not just (or not even!) its shareholders. This was obviously (and now more obviously) bullshit in pursuit of that same profit maximization, but given how they lobbied for it, I think it's entirely fair to criticize them on this basis.
Look the American people have voted for a Republican party who approves of lobbying. Don't get angry when companies actually do it and do it well.
And the tax cuts were bullshit and many economists said so but the American people voted for it overwhelmingly. Because Americans always vote for tax cuts.
Look the American people have voted for a Republican party who approves of lobbying. Don't get angry when companies actually do it and do it well.
"The American people" is not a singular voting bloc. Those of us who don't vote for such things are well within our rights to get angry, as are those who did vote for the party but feel betrayed by it.
the American people voted for it overwhelmingly. Because Americans always vote for tax cuts.
The American people largely disapproved of the tax cut, and that has held steady in the year since its passage [1]. California soundly rejected the repeal of its gas tax. Americans don't always vote for tax cuts.
Verizon plays the game by the rules and they won.
Then let's change the rules? Defeatism can feel good, but it's unhelpful.
>The American people largely disapproved of the tax cut
The media spoke negatively - almost to smear campaign levels - about the tax cut from the very beginning. Is it any wonder?
>and that has held steady in the year since its passage [1]
According to your source, support has increased. It’s still not popular among a majority, but post media smear campaign (mostly) support has gone up from 29% to 39%, and disapproval down from 56% to 46%. That’s pretty big.
Can you clarify what you mean by “smear campaign”? The negative stories I read mostly focused on how the tax cut would increase the defecit and debt (which it did [1]), how companies were likely to use it for stock buybacks versus investment or hiring (which they did [2]), and how the tax cut would disproportionately benefit higher earners (which it did [3]).
Entitled “The richest Americans get a $33,000 tax break under the GOP tax law. The poorest get $40.” What it fails to mention is the fact that the richest Americans are already paying the brunt of taxes, while the poorest are already barely paying any - as it should be. However, the headline paints a very biased picture.
See also the Wiki article on the Tax Act, which speaks to the media “assailing” the Tax Act, and provides examples. See this article
Entitled “House Passes Historic Debt Increase”, while it may technically be correct, it’s also misleading and very biased. No mention of the near-$500-$1k a year tax break the average middle class American receives under the Act? Or the increased employment numbers?
Regarding complaints of adding to the deficit, note that aside from Fox, most media outlets - that had previously reamed W for his, rightfully so - payed little attention to the fact that Obama increased the deficit almost twice what Obama did.
It’s the picking and choosing that bothers me. Border walls and stricter immigration policy was endorsed by Dems until somewhat recently... until Trump endorsed them, now they’re the worst ideas ever. Budget deficits are fine when they’re the result of policies the Dems like... but now they’re horrendous.
I agree that the Tax Cut should have included bigger breaks for the lower income brackets, but they absolutely are still getting a break, and unemployment numbers are at record highs.
The tax cut wasn't that great, most Americans didn't get enough to notice it and it didn't spur any job creation, in fact it's pretty much been used to pay out shareholders. Job growth has been slowly since Pres. Trump took office, mainly due to the uncertainty he's created in the markets due to trade wars and destabilizing relationships with allies. It's also true that as the markets have become more saturated this is to be expected, however salaries haven't risen despite a favorable business environment suggesting pretty much every company expects a downturn and backlash to reality. I got a pretty good sized tax cut. I'd rather pay more and have guaranteed healthcare that wasn't employer based, but that's a sample size of one. In your case you're touting $9-$18 a paycheck for the middle class as something to be excited over? They're going to lose their healthcare and jobs because of that tax break. Pretty sure that's worth more to them which might be some of the reason that support for the tax cut was lackluster.
Obama didn't increase the deficit. Congress did, congress controls the budget, the buck stops with them. Obama had a friendly Congress for precisely two years and they basically did nothing worth remembering other than the Affordable Care Act which will be rolled back and push us back to the pre-existing conditions, even higher cost healthcare the at predated it, because Congress won't allow Medicare to use competitive drug pricing.
The reason the debt went up is because we were in a recession, fighting wars, and cut taxes. Of course the debt went up. You always need to spend governmental money to pull a country out of a recession, the government is the only one with enough money to do so. Same thing prior to capitalism. Cities that flourish have strong governmental spending. What we need to do is actually raise taxes and pay for what we've already spent. There's no amount of cutting taxes that will make us reduce the debt. I personally prefer the balanced-budget requirements, i.e. you can't spend money unless you say exactly where it's going to come from beforehand. I also wish that there were more studies spent on efficacy of money spent against the purpose and this was published regularly by the CBO.
As for the border wall, it's a terrible idea. No one is against border security, however border walls are a relatively terrible idea in most places due to costs, land rights, water rights, etc. It would be far more effective to spend money on more agents and automated drones to assist border control. Add to that we don't have a wall at the border with Canada so the idea of only protecting the Southern border comes across as silly since most people who are here illegally simply overstay their visas. If someone really wants to get into the US, it's trivially easy through numerous locations.
So a tax cut means that unprofitable businesses ought to invest more in those unprofitable businesses? That is some ridiculous logic.
Since there is such a “shortage” of engineering talent (to hear the H1 advocates tell it,) those laid off people should have no trouble finding a job with a profitable company.
Has anyone tried to use an OATH site from the EU and tried to make any actual GDPR decisions? It's unusably bad.
Now, it may well be perfectly legal to render the site completely unusable if you don't want the default (I'll let others argue that out) but... it's meant my personal use of these sites has dropped to zero. I literally go "Oh, OATH, never mind."
I might not be in the majority, but it sounds like they could use all the visitors they can get.
Yes! The most noticeable change has been to Tumblr, which I believe presents the Oath GDPR notice on each subdomain. I have almost completely stopped visiting peoples’ Tumblrs for this reason.
One unintended positive effect of GDPR, much like “turn off your adblocker or no content!” modals, has been to deter me from reading pages that, by and large, would have been a needless timesuck anyhow.
It seems like it’s designed to make it difficult or impossible to access OATH sites without consenting to tracking. GDPR test case waiting to happen, surely?
Same here. But then I also started skipping Medium links for their obnoxious 'let's make it official' sheets.
And as far as I understand, Oath is indeed not compliant with the GDPR, because the default action should be to not permit tracking (opt-in rather than opt-out). But IANAL.
It would be nice if link aggregation sites such as Hackernews or lobste.rs provided a flag to indicate whether a linked page can be read immediately or requires clicking through overlays of any kind, so that those of us who are not interested in that crap can just skip those links.
It would be nice if the web could just return to being hyperlinks between pages of text. Just don't track by default.
When Yahoo was Yahoo the “Yahoo” bit (everything that wasn’t the Alibaba shares) was valued as negative dollars for a bit given that the market cap of YHOO was less than the value of the Alibaba shares. So if now it’s “virtually worthless” that’s better than being worth negative dollars. (Trying to see the bright side here.)
Does of course raise the question of why did Verizon pay anything for Yahoo but those are the tough questions Verizon’s executive team will need to answer for its shareholders.
YHOO was discounted on their BABA stake largely because nobody believed they could divest that holding without paying a huge tax bill
Even after Yahoo! was spun out and the old corp was turned into AltBaba with only the BABA and Yahoo Japan holding left over it still traded at a discount to the value of it's actual holdings for this reason
Second part also: investors didn't trust YHOO management not to keep plunging good money after poorly invested money into more bad ideas - that also had a negative value, until the sale was announced and it didn't
edit: should also mention that Verizon are incentivized to write-down the value of both Yahoo and AOL here for a host of reasons - one of which is to reduce their tax bill. They probably /s are both worth a lot more than zero if being sold on the open market today
Purchase under newly formed company. Take 20 dollars worth of office supplies. Declare bankruptcy, deal with liabilities. You've doubled your investment.
> When Yahoo was Yahoo the “Yahoo” bit (everything that wasn’t the Alibaba shares) was valued as negative dollars for a bit given that the market cap of YHOO was less than the value of the Alibaba shares.
That's not how it works.
First, when a company's price-to-book ratio (the ratio of the company's share price to its book value per share) you can't take semi-arbitrary parts of the company's book value that add up to its market cap and declare the rest to be worth negative value. The situation arises because investors value the overall package less than someone who would like to own the assets outright.
Second, static piles of money will always be discounted by the market, particularly when they are mostly illiquid (as the Alibaba stake was). If the Alibaba stake had been separated out into a publicly-traded company by itself it would have traded well below its book value, because what rational investor wants to buy into a static pile of money?
> because what rational investor wants to buy into a static pile of money
I'll happily pay you however much you let me buy of a static pile of money for under the dollar amount of the pile, as long as the difference covers transfer fees. I'm pretty sure I wouldn't be the only one either.
This to say that when you state "that's not how it works", that's your analysis of the market, and you're free to rationalize how you think the market arrived at a current valuation, but other people will rationalize it differently. That's the whole reason why different investment strategies exist.
Stock isn't money. If you owned 50% of the shares of Google you couldn't easily turn it into 50% of Google's market cap. You might be able to turn it into 45%, but the price right now is the price at the margins to buy ~1 share from someone who is willing to sell one share. If you tried to sell half, you would find radically less people are interested at that price then you would need to sell all of your portfolio.
But you'd also find people would be willing to lend you actual money using your stock as collateral. And if the stock tanks and you default on the loan, it's often the lender that gets screwed.
The nominal interest depends entirely on their faith in you and their estimates of future value.
There are various standard scams associated with games like this.
To keep it simple it's true that stock isn't money. But it's unbelievably easy to turn stock into money without necessarily having to sell it, or without being forced to modify the market rate with a giant stock dump.
But you can't turn a large amount of stock into 100% cash through a loan, either. Many banks will give you <<100% of the stock value in cash, but no bank will give you close to 100% of the value[1]. You get to pay interest on the cash loan, too, which makes it worse than a pile of cash.
The scams, as far as I can see, relate to the bank overvaluing the collateral or its liquidity, which is rightly the bank's fault, so it's reasonable that they bear the risk and get screwed. Unless it's a pure scam though, the lendee gets screwed too, by losing the collateral (and a lot more of it than necessary, if it's liquidated at short term lows).
[1] Unless the bank is playing the bubble game of collecting interest on the loan and not caring if the loan defaults or the underlying asset drops below the outstanding loan amount (could be either because they anticipate a bailout, or they already got fat salaries and bonuses and don't care if bank goes down in flames, but most of that kind of fiduciary irresponsibility is punished by regulations).
If you take a loan against a massive amount of stock, the lender will almost certainly hedge it by buying options, and the option seller will hedge by selling stock.
Which helps with this analysis as risk and time value of money etc reduce the value of a future pile of money. Buying into a stack pile of money you get tomorrow is worth far more than that same pile at some potential point in the future.
>I'll happily pay you however much you let me buy of a static pile of money...
The money probably has outstanding tax liabilities (the Ali stake does), there may be other outstanding claims or legal restrictions on the use or divestment of the money, you have no say in how the money is used for investment or other purposes and no control over when or how the money is divested if ever.
Compare that to just keeping your own money in a savings account over which you have full control.
If I want to invest in Ali am I better off buying Ali shares myself, or buying a stake in a big pile of Ali shares I have no control over? It's not even an actively managed fund so you're not even getting that benefit.
> I'll happily pay you however much you let me buy of a static pile of money for under the dollar amount of the pile, as long as the difference covers transfer fees. I'm pretty sure I wouldn't be the only one either.
Why? What does that gain you? You lose the use of the money you put in to buying the asset. You have no access to the money backing up the asset. That underlying asset might be going up or down in value, but none of that value change is being paid out to you.
> This to say that when you state "that's not how it works", that's your analysis of the market, and you're free to rationalize how you think the market arrived at a current valuation, but other people will rationalize it differently. That's the whole reason why different investment strategies exist.
Most investment strategies are shit in the long run, particularly those that are rationalized (i.e., superficially reasonable and valid, but actually supported by unconscious or specious reasoning). Discounting the value of an asset you cannot directly purchase and control is not one of them.
When the bit you chop off is basically a vault full of cash then yes you can easily value what’s left as negitive if the whole company is worth less than the cash in the vault.
> "Does of course raise the question of why did Verizon pay anything for Yahoo but those are the tough questions Verizon’s executive team will need to answer for its shareholders."
Good question. But let's take it a step further, which Wall Street outfit advised on and brokered that deal?
Of course the Verizon brass is ultimately responsible, but they weren't the only one who got it wrong. That said, I bet the WS firm that got it wrong still made out pretty well.
Just per the article, AOL was $4.4B and Yahoo was $4.5B. Now, just ignoring any tuck in acquisitions that Oath has made as a unit (presumably goodwill being rolled up under it), you have $9.9B in acquisition costs with $4.8B in goodwill initially.
They are just saying they overpaid by $4.6B, and it's now worth $5.3B. If any CPAs are out there would love to know if my interpretation is right.
> Verizon said in the filing Tuesday that it last assessed the Oath brand's goodwill at $4.8 billion. Writing off $4.6 billion of that means Verizon now values Oath — including AOL and Yahoo subsidiaries like Yahoo.com, AOL.com, the Huffington Post, MSN and TechCrunch — at just $200 million on paper.
They are saying the value the brand adds to the underlying assets (goodwill) is really 4% of what they originally paid. The brand is relatively worthless.
I think if you look at the definition of goodwill, it explicitly does not include brand value. https://en.wikipedia.org/wiki/Goodwill_(accounting): "Examples of identifiable assets that are not goodwill include a company’s brand name, customer relationships, artistic intangible assets, and any patents or proprietary technology"
edit: https://www.economist.com/business/2014/08/30/untouchable-in... - we're both right. Brand is on balance sheet as an intangible, but it doesn't reflect all brand value (and in an acquistition that's frequently reflected in the goodwill). I know that goodwill can reflect expected cross-selling synergy, expense reduction from redundancy layoffs, less pricing pressure, etc, also.
Goodwill isn't the value of the brand. It's just an accounting term to account for the difference in book value and purchase price. Goodwill is basically everything valuable about a company that isn't reflected on their books. Things like relationships with suppliers/buyers, customer base, institutional knowledge, specialized employees, etc.
They're not. That's why purchase price and book value are often different. Goodwill is the difference between the two in order to make the purchaser's books make sense.
Let's say you're buying a trucking firm. Their only assets are 10 trucks worth a total of one million and they have no liabilities. The book value of that firm is one million. Let's say that the firm is one of the few with the specialized knowledge required to ship radioactive waste. They make quite a bit of money so you buy them for their market value of 10 million.
If we look at your books, it looks like you just spent 10 million for 1 million of assets. In other words, your company just lost 9 million dollars. Obviously that doesn't make sense. The accounting way out of that is to add in 9 million dollars of goodwill. The transaction is then 10 million for 1 million worth of trucks and 9 million worth of goodwill. So now you're paying 10 million for 10 million worth of assets and don't show a loss on your books.
Say a year later due to some safety issues you lose your license to ship radioactive waste. Now the trucking company is just a regular ole trucking company and worth a lot less. So you write down the value of the goodwill so your books reflect reality and use the write down to offset profits to lower your taxes.
SaaS companies are very asset-light. Take a look at Salesforce, for example: $17.5 billion dollars of assets on the balance sheet... of which ~$6 billion is cash, $7 billion is goodwill, and only about $141 million is capitalized software.
(Most of their expenditures to produce software are expensed rather than capitalized.)
On the lower end of the scale, liabilities of SaaS companies exceed assets (as measured formally for a balance sheet) quite frequently. The shareholder equity for both of my businesses was negative when I sold them.
I'm not an accountant so take this with a grain of salt, but no a SAAS company would not have a zero book value. The software powering the company is an asset and should be a quite valuable one. A zero book value company would be something like a consulting firm.
Because it’s impossible to come up with a fair value for these concepts. They are not fungible, traded goods, nor is there an actual amount paid at some point to buy them as a reference.
Then they are preparing for this year/quarter to be a "big bath." They are basically compressing all their bad stuff into a certain time period so that in the quarters/years immediately later, their earnings are higher than they would be otherwise.
Wait, am I missing something? It seems like that's consistent with the article.
I agree that goodwill is (depending on exact definition) essentially the expected value of a business in excess of its tangible assets.
Verizon paid $8.9B for AOL + Yahoo. Oath has ~$5B of assets, which sets a rough minimum for purchase price: that's what you'd pay for the remains if Oath gave up and liquidated, and it was presumably a fixed cost in Verizon's initial purchase. (Less whatever AOL and Yahoo have in post-acquisition asset gain, but I can't imagine it's enormous.)
Assessing Oath at $4.8B in goodwill + $5B in assets implied a modest gain in value (or perhaps more likely, tertiary acquisitions under the brand). Reassessing goodwill to $0.2B implies that Oath as a going concern is producing basically no value beyond what you'd get from selling off the computers, office space etc. Which seems pretty plausible, since it's hard to imagine e.g. Tumblr ad revenue even paying off its own operating costs.
Regardless of anything else about the brands, that sentence is certainly wrong. It pretty much just reads "this was written by a reporter without a financial background".
The one thing that definitely isn't worthless here is "the assets of the communications giants Yahoo and AOL". Those are worth $5B, as noted further down in the article. Verizon has written down almost all of the goodwill value of Oath - which despite the name is not brand equity or consumer loyalty, but the collected sum of a company's non-asset value.
The discussion above is about whether it's fair to describe a division as 'worthless' when its assets are still quite valuable and its operations were not so much valueless as grossly overestimated. A lede which introduces the topic while horribly misusing the term 'assets' doesn't have much bearing on that.
AOL will always be priceless in my opinion. It helped shape and spawn tens of thousands of IT people and programmers. Anyone from back in the days of AOL 2.5 or 3.0 that used 1IM punters, cchats, <M><, scrolling on internals, etc. will know what I mean. The internet was a wild and amazing place back then.
I very distinctly remember downloading the AOL update that added a "browser" for "the world wide web". Up til that point, AOL was pretty much a walled garden where you could only access content created by AOL or other members. It may have had some level of Usenet access? I forget.
I had no idea what this web nonsense even meant, but I was extremely excited to find out. Turned out to be a pretty good idea in the end.
My memories of AOL have faded, but I believe the early web access was only through their built-in browser and was very limited. ("Enter keyword: DEALS" etc.) At some point they started providing SLIP/PPP or whatever it was that normal ISPs used to enable IP over dialup.
Thia is literally the first good thing I've heard anyone say about AOL from back then. Even back in the day, it didn't have a good reputation. But yeah, undeniably influential.
Yes. When I'd stay with family or friends that had AOL dialup the first thing I did was install Netscape. However, this was the late 90s; I'm not sure if the client created a proper TCP/IP stack in prior versions.
On day one they were the kings of the early web, but they were playing catch up from day two, because the original thing they made their names on was intrinsically useless as soon as the web got too big to enumerate - in about 1998. Since then their business has consisted of hanging things off the side of things hung off the side of things... and trying to sell advertising. Every good tool they made was a loss leader, orphaned from conception by the economic fact that doing it better would bring in no more revenue. They were never capable of being Google.
Nah, missing the point. They had plenty of talent to build things. They didn't want to. Building things was a loss and a waste. If they were good enough to hold a large mass of people inside the eyeball-farm - then they were good enough.
They never had Google's attitude that "what helps the web helps us".
Their search index was great back in the 90s simply because it was so localized to a specific interest, location, theme, etc. Wayfinding was a hell of a lot nicer back then, but didn't scale in the face of Google. I do miss the intimacy of search on Yahoo from back then.
And it was easy to control _how_ and _where_ you wanted your site to appear in the index. It's naive to think something similar would survive endless spam nowadays, but damn, I liked and really miss it.
> Their search index was great back in the 90s simply because it was so localized to a specific interest, location, theme, etc. Wayfinding was a hell of a lot nicer back then, but didn't scale in the face of Google.
To be fair, it didn't even scale in the face of DMOZ (née GnuHoo), which was similarly structured and human curated, but Wikipedia to Yahoo’s Britannica.
Even after Yahoo missed the chance to buy Google, they missed other significant chances to control Google. Yahoo bought Overture (previously goto.net) which had the patents on internet advertising. I recall Google paying $300M to Yahoo for a license to the patents. I think this may have been under the helm of Terry Semel. My thinking back then was that Yahoo severely underpriced that patent.
I can't say i know a lot about Yahoo. ( Too young and European ). But i'm not sure they could have been Google or Facebook. I've always perceived Yahoo as arrogant without a vision. An analog IT company if you will.
Most support seems to be nostalgia. But if somehow Yahoo did buy Google or Facebook I doubt Yahoo would have been up to the task to make it as successful as they are now.
The internet bust of 2000 damaged Yahoo for years to come and from which they never recovered.
The primary damage was psychological. Investors lost faith in technology so after 2000 tech companies scrambled to reinvent themselves as "not tech" companies.
Yahoo was one of the worst examples, hiring CEOs that tried to turn it into a media company. Yahoo's technology investment suffered and they had no technology strategy for too long.
It would be hard to "be Google" just through business decisions. The pagerank secret sauce is what vaulted Google ahead of Yahoo back in the day. Yahoo never had better tech than the competition so far as I know.
Agreed. And building on your point, I think even in the "late" era of Yahoo they had a chance of correcting course through their partnership with Mozilla.
Mozilla has a real vision, and Yahoo could have moved the vast internet properties under its control into conformity with Mozilla's vision in various ways, and given real legs to things like Persona, or the various other beautiful Mozilla Labs projects.
To me that's an ultimate what-if, and a missed opportunity for both companies.
Probably! Yahoo had a lot of social networking features early on, before it was really even called that: games, chat, personals, message boards (for stocks/finance, etc.)
Yahoo was so great in the 90's! It was hard finding things on the early Internet. What they were doing with directories and search seems primitive now, but it really ground breaking. I still remember the first time I discovered it. Probably late '94 (before it was called Yahoo) or '95...
>Yahoo had a lot of social networking features early on, before it was really even called that: games, chat, personals, message boards (for stocks/finance, etc.)
Exactly. Yahoo had more organic pieces of a true social network than Google ever did. In addition to the ones you listed, there were their news properties, groups, fantasy sports, and later on, properties like Delicious, Flickr and Tumblr. They could have had something really interesting under good management (admittedly a huge caveat).
They had the pieces to a more plausible facebook competitor than Google ever did, and even Google's best potential seed of a social network, Google Reader, was mismanaged in a failure of strategic vision. In any case, I'm not among those who think Yahoo was doomed. They had the pieces to become something interesting.
So did Yahoo have a bigger impact on the 90s than Google on the modern generation of the internet? It sounds like Yahoo created a lot of the products we use today but Google incrementally improved them.
Google invented search as we know it. Before that, search results were basically paid advertisement followed by some links to tangentially-related pages. Searching wasn't really an expected use-case, IIRC, Yahoo was modeled more closely to a digital Yellow Pages than a search engine. That's apparently one of the reasons Amazon picked a name starting with an A.
Yahoo turned down the option to buy early Google. They didn't see the value in search because it would take users away from their site. They wanted users to stay on their site and participate in discussions and such.
But in the 90s they had no real competition and some of their products were actually pretty good and convenient given the limitations of the time.
Everyday I woke up with a phone call from yahoo at my chosen time telling me how many unread emails I had, the weather for that day and what events my calendar had.
Yahoo was "the Internet's homepage" (before Reddit co-opted that), and was, when keyword-based search was kind of sucky and already getting gamed (HTML "keyword" headers, if anyone remembers those, Lycos, HotBot, Alta Vista, Ask Jeeves, ...) a pretty good way to find things. The Yahoo directory itself (Yang's Hierarchical Officious Oracle or Yet Another Hierarchical Officious Oracle) was carried forward for a while as DMOZ (since killed), and has certain similarities to Wikipedia, though that focuses on knowledge and not necessarily webpages. To that extent, I find Wikipedia more useful today, because it tells me what I'm looking to find out, rather than directing me to some page, which may, or quite probably, may not, have what I'm looking for. And in either case, almost certainly assaults my senses.
Yahoo also served as an information hub. Before there was Google News, there was Yahoo News, Yahoo Weather, Yahoo Finance, Yahoo Maps (I think). One of the first online web-based email services (and still a large, though declining, share of the market, along with Aol and Hotmail, along with a few other relics).
The consumerisation of Yahoo was already turning me off by the late 1990s, and I remember running across the first print magazine pushing that side of the company in San Francisco in the late 1990s / early 2000s, and deciding that the company had jumped the shark so far as I was concerned. I've always lead the crowd....
(I'm not bragging. I'm saying that if I predict something, give it another 20 years. Though I occasionally get closer the mark.)
At the time, there wasn't anything on the Open Web that was close.
There were entirely closed portals, most especially AOL, and other early online services (Prodigy, CompuServ, etc.). But the idea of one place you could go for all of that, no. Yahoo started the Portal Wars. (Best rejoinder ever: "My ass is a portal".
One version of that (from 1999, and, of course, /.), here:
So, at the time, Yahoo was huge. And the Internet was tremendously smaller than today -- about 100x fewer people online then than now -- call it 30 million rather than 3 billion users. Today, a social site with "only" 30 million MUA is considered a failure or minor player.
You are holding Yahoo against its potential, because in absolute terms, Yahoo still commands about 10% of the US search market. That is nothing to sneeze at.
I miss Yahoo games. That was the only semi-engaging/social part of the site and they killed it. Dumb decision, almost as dumb as Google killing Gtalk/gchat
I'm really surprised by how poorly Yahoo has managed...Yahoo, but especially their movies page.
I used to use movies.yahoo.com as my hub for trailers and showtimes, even in the era of top Google. Now, the first thing you see is a mishmash of entertainment news, presented in a boring vertical format. There's no prioritization of the biggest movies being released, no big horizontal banners sliding with the newest movie releases being shown off, etc. It's boring, innavigable word vomit on a white background. I can't even fathom why the decision was made to make it so boring and useless. How could this have possibly made Yahoo better?
I remember that pictionary type game they had. I would play with a friend in the schools computer lab. when it was our turn to draw, we would share the answer with the other person, then draw the most outlandish thing. of course when my friend typed in the correct answer everyone else was like, WTF.
By being very expensive to run. In 2016, they had 8500 employees. In comparison, the 5th most popular website (reddit) has <250 and has not exactly been the greatest financial success story either.
The primary business that Yahoo is in is really content production. And content production just isn't as high margin as search.
It's just a sign of corporate rot. Yahoo doesn't do anything nearly complicated enough to warrant that many employees. And I'd be willing to bet more than 1/3 of them are "managers". Cull the non-engineer/product/design people I say.
I don’t see how it would be possible to have that many good engineers left at Yahoo. I would think that most of the good ones left a long time ago and they are suffering from the “Dead Sea Effect”.
When I was there (2005-6), there were many layers of management between me, a developer, and Terry Semel, CEO (IIRC, it was more than 10, possibly even 15.) Often it was like working in Brazil (the film).
Ouch. That really sucks. They also had soooo many services its hard to keep up when you rarely go on their site to begin with. Like years ago you could watch some shows off their site. I found out through a college professor. I never bothered trying to watch anything off their site though. I dont know what the answer should of been for them but 8k employees sounds crazy. Tumblr was a decent investment but I suppose without properly putting ads on it, it really didnt return much.
Yahoo had everything from an IM service, mail, hosting, groups, fantasy sports stuff, Geocities once the defacto free site host of the internet, their own web browser at one point iirc and loads more.
You see it a lot on the internet: offer something for free, millions of people sign up, money runs out, scramble to monetize, users flee to the next free service.
> That doesn't mean Oath is actually worth only $200 million in cash — Oath said it still has about $5 billion of real assets remaining. On the other hand, Verizon calculated that, after taxes, the write-down would knock $4.5 billion in real money off the company's income in the fourth quarter, which ends Dec. 31.
Doesn't make sense. I don't have detailed understanding on finances but Tax writeoff should be beneficial when you have a valuable assets still in use which can be written off in book.
In this case they have spend $5B only to write if off the following year. Something else is going on. I don't think these guys are so stupid.
Not that I disagree with the sentiment here, but there’s a pretty gigantic footnote in the article that relegates it to the bargain bin of overhyped clickbait:
”That doesn't mean Oath is actually worth only $200 million in cash — Oath said it still has about $5 billion of real assets remaining.”
Oath’s goodwill was dramatically overvalued, but the fact that it has $5 billion in real assets makes it difficult to describe the “almost worthless” label used in this article’s title as anything but clickbait.
It's not clear what those assets are. But absent revenue, it means Oath is basically just a bank with a mishmash of investments. Same way Yahoo's entire value is shares of Alibaba. It's extremely valuable even though it's not a viable business anymore.
Worthless to who? The headline seems mean spirited.
A friend of mine used to work at Yahoo in the in the news department.
She said it was one of the best teams she'd ever worked in (they were supportive with a spurious but difficult legal issue she faced ) and she pushed out some really great reporting during her one year contract.
It might be worthless to Verizon, but many people enjoyed working there and I know her articles got read because a few had a national impact.
Of course that is just a microcosm of the overall company, but it's sad that a friendly workplace gets deemed 'worthless' when so many abusive workplaces are overvalued.
"Worth" in this context is strictly financial. As in, that watch is only worth $5, not how much it's worth to you because your grandfather gave it to you. I don't think most people would have read into it as much as you did.
You're absolutely right. Though I'm not sure Yahoo really adds value to anyone. Their platform is clunky, the can't seem to manage even the most basic level of user data security, and they can't seem to figure out a way to make money. We should value more than just investor profit but I don't necessarily think Yahoo is an example of valuing profitability over everything else.
Those investors were most likely paying your friend's salary. Also, don't forget the massive data breaches Yahoo! has had. They are a huge net negative on the internet.
Yahoo! didn't grow the company alone though, they used investors. Getting a return on investment is the entire reason a company exists, otherwise it's a non-profit.
They just got a new CEO so it might be tax avoidance and also a new CEO wanting to start with a better so that he wouldn't have to take the write down later when it would be blamed totally on him.
Wow - I had no idea Yahoo! Music was that big that recently.
Sort of hard to guess how much blame anyone at Yahoo actually bears for that decline, though. I notice 2007 was also the year Apple released the iPhone and started selling DRM-free music via iTunes, which has to have been something of an outside-context problem for a music web service.
In general, it looks a bit like they suffered the same fate as the earliest smartphone designers. It was a worthwhile product, but practical constraints rewarded a restricted version (Palm Pilots, wholly local music storage), and the business fell out of use before there was enough space to provide a fancier version (iPhones, Spotify) of the same offering.
As I said when the Yahoo data breach was uncovered, Verizon was should've reduced the acquisition deal by billions or even scrap it altogether. Instead they only reduced it by $350 million from $4.8 billion. Dumb.
Either way, I'm actually happy with this outcome, because for one Yahoo was destroyed due to its data breach and allowing the NSA to put backdoors on its servers, and second Verizon said it's getting out of the content business.
That can only be a positive for all Verizon customers, because Verizon being involved in the content business only meant more and more spying on its customers' web behavior.
Hopefully we'll see more such cases where the value of companies suffering major data breaches is reduced to almost nothing. Maybe that will change the industry's thinking about data security and data collection a little bit.
I've also long argued that governments as well as corporations should see data collection as a liability. So that when a data breach happens and everyone's data is exposed, they should be fined into near-bankruptcy. However, if they minimize data collection and they encrypt the data they do gather in such a way that even the companies themselves can't access it (end-to-end encryption, fully homomorphic encryption, etc), then they should be immune from such fines. I figure that would swing the pendulum towards companies minimizing the reckless "all they can get" collection of users' data.
All you are doing by making such punishing consequences is giving hackers an actual motivation for breaching public companies.
Right now if data leaks, maybe you get some emails and user data which is cool but ultimately useless beyond spam value or for identity fraud, or perhaps for hacking some other financial accounts that may be of some value, but also adds more risk.
But if you know a company could be utterly destroyed with fines, you can open up a huge short position on the company and then publicize the breach somewhere and wait for the stock to drop to zero.
Or maybe you’re a startup and want to eliminate some competitors. Pay off some hackers in bitcoin to attack and breach their servers and watch them go under.
You could take your reasoning to physical security, and say that banks shouldn't be expected to protect customers' safe deposit boxes, because a bank robber could open a huge short position in the bank, rob them, and profit from the loss of customer trust.
The equivalent argument is that if one branch of a bank gets robbed they should be fined to near bankruptcy, which would almost certainly cause a drop in shareholder value.
No. GDPR says data is yours to give or not, and direct its use. HIPAA says it has to be kept safe, but it isn’t actually yours, and you can’t just ask that it be deleted.
I actually quite like the Yahoo Sports iOS app, it's way better than the bloated, buggy, ad-ridden disaster that the ESPN iOS app is. I used to use Yahoo Finance like some others here also. And their RSS reader was pretty decent before. There's some non-terrible pockets of Yahoo still hanging around.
MAU and DAU. Plenty of companies focus only on those two metrics for valuation. Oath(Yahoo/AOL) still has massive amounts of both. Yahoo and AOL mail form an enormous (albeit aging) captive audience. The quality doesn't matter, only the number. All the other things people are commenting on are irrelevant to Verizon. What it is writing off is the value of the content channels, Yahoo Finance, Techcrunch, etc. Yahoo is one of the last companies actually paying people full-time to produce internet content for their own channels. That content is not popular enough to sell enough ads against to meet their projections. So, they just write it off and use it as an excuse to cull full-time labor costs. It will be contracted out.
Can someone explain how the accounting plays out on these write-downs? So they take a $4.5B write-down in the value of the assets, does that mean they now have a "loss" to use against their income and reducing their taxable income?
While I agree that this was a bad investment for Verizon and clearly it's a failure in many ways, the justification for the headline is massively misleading. Writing down goodwill in and of itself is not evidence of anything. It's an accounting adjustment. The amount of goodwill on the balance sheet is just there to make things balance (thus the name) after an acquisition, and the goal is to get rid of the line item eventually.
I guess it makes for an appealing lede with the big number of dollars, but it's meaningless. Focus on the real evidence of failure, not the balance sheet shenanigans.
Is Yahoo Mail worth nothing? I know that Gmail is the main email that people use for personal accounts but there are millions of people on Yahoo mail and have been for twenty years. I can't believe that is worthless.
The two questions I'd ask are what percentage of those millions of accounts are actively used and what their cost of providing the service is. I could easily believe that the costs of processing and storing all of that spam for people who switched to Gmail a decade or more ago are greater than the ad revenue from the percentage of users who actually login to the site.
I'm pretty sure Yahoo, before and perhaps after the Verizon acquisition, did more than one “use it or lose it” account purge, intended to sweep out zombie accounts.
I believe you’re right but I would still be curious about the number of people who logged in enough keep their accounts alive but not enough to make appreciable ad revenue. Disk isn’t _that_ expensive but it’s not free either and Yahoo! was never as good as Google at targeting so they can’t have had the best ad rates.
I was thinking the same about AOL. My cow-worker in the next cube still uses his aol email, as does an Aunt of mine. How to wring value out of it? is the question I suspect the VZ folks couldn't answer.
Not to ignore your point. IMO having been so thoroughly pwnd by various crackers over the years and with barely an apology to its users Yahoo Mail's surprisingly worth more than a liability, but less than a slap in the face with a fish.
AOL still has a healthy subscriber base to dialup so is at least generating revenue for Verizon. Perhaps VZ should spin off Yahoo! as a separate entity to survive on its own. What's Melissa Mayer doing these days?
I agree with their assessment. That's why they should sell both of them to me for $1 Million. Hey Verizon, if you happen to read this, I will take that burden off your hands. PM me!
It'd be great to see some enterprise, be it another tech company or private investors, swoop in and maybe rescue a few properties since Verizon views them as worthless. With the right vision and leadership I still think some of these could be real assets.
A long time before the Verizon acquisition Yahoo spent a lot of money trying to build big google-like cloud scale datacenters in a place with cheap electricity. If Yahoo is effectively worthless, I foresee some empty space...
Pivot to what exactly? Suggesting that they just "pivot" is like a rich person looking at the family living out of a cardboard box under the bridge asking: "Why don't they just get more money?"
Sure both Yahoo and AOL must have talented people working there, but that's kinda useless if you don't make them work on profitable projects. Finding the profitable ideas is the hard part.
If you have equal changes of pivoting in any given direction and use a random number generator to choose which direction to go in, it's called Brownian Motion.
A startup I worked for was acquired by AOL, all the good engineers left as soon as possible. Bureaucracy, lack of any vision, slow at everything. AOL was a media company, not a software development company.
I'm amazed that they haven't had massive layoffs. They're both popular enough to the point where they could turn a profit with a significant shift in how they operate.
https://arstechnica.com/information-technology/2018/12/veriz...
https://www.wsj.com/articles/verizons-severance-offer-goes-t...