When Google was still private it generated a great deal of interest, so much so that Yahoo offered to buy them out at one point. I don't remember the details exactly so the numbers here are very rough and are just an approximation of the numbers being thrown around at the time:
(The numbers here are rough estimate from my memory. I use the numbers to give a rough estimate of how Google was being valued back then.) Google was a small but growing rapidly search company in the early 2000s. Yahoo came around and liked what they saw and offered to buy them. I don't remember the price but it may have been about $300 million. Whatever the number it was a very large multiple of revs. Google came back and said OK but we want a higher price how about $600 million - $800 million (Again an approximation). Yahoo thought about it and said OK. But then Google changed their minds again and said no we want $1 billion. At this point Yahoo walked away.
What if Yahoo had bought them for $1 billion? All one can say in response to that is wow, especially since Google's market cap is over $150 billion. I do give Yahoo management credit though as they were able to sniff out a real business in its early stages and they came so close to owning them. Yahoo did own Google shares when Google went public in the summer 2004, so maybe Google will return the favor and buy a stake in Yahoo. I don't see them buying Yahoo but I do think they could make a strategic investment in Yahoo though. After all these are all former Stanford guys.
* Disclosure - I do not have any position in either Yahoo or Google. The firm I advise may or may not have positions in either of these two companies.
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment