Today some people question recent internet acquisitions such as Google paying 1.65 billion for Youtube, and Microsoft valuing Facebook at $15 billion. What they don’t realize is that companies of far less reach, making little to no profit, and having very vague business plans were bought out during the 1999-2000 Internet bubble for much larger prices. Here are the 6 worst internet acquisitions of all time:
1. Yahoo Buys Broadcast.com
In 1999 at the time of the internet boom, Yahoo! paid $5.65 billion for Broadcast.com, acquiring the company and renaming it Yahoo! Broadcast Solutions. Over the next couple years Yahoo split the services previously offered by Broadcast.com into separate services, Yahoo Launchcast for music and Yahoo Platinum for video entertainment. Platinum has been discontinued, its functionality being offered as part of two pay services, AT&T Yahoo! High Speed Internet and Yahoo! Plus, both of which turn little to no profit for Yahoo. The price tag on Broadcast.com ended up being $710 per user for Yahoo. That shows just how large the Internet bubble really was. What if Yahoo had invested that 5.65 billion into its search technology or even better yet bought out Google in 1999?
2. TimeWarner Merges with America Online
What was Ted Turner and company thinking? In the midst of dial-up becoming a thing of the past, they merge with the leading dial-up company in AOL. Although, almost 8 years after the merger Timewarner has made strides with AOL, Google now Owns 5% of AOL, and they are considering merging yet again with Yahoo who happens to have made the #1 biggest acquisition blunder. (as seen above)
3. AOL Buys Netscape
In 1998 when the Internet was just starting to creep into people’s minds, America online dished out $4.6 billion for Netscape, the leader in web browsing technology. The problem here was that Microsoft had just begun rolling out its Internet explorer web browser. Netscape now is used by under 2% of web surfers, and even Internet Explorer is second rate to Firefox, a totally free web browser. Netscape.com is now a news portal with relatively low popularity, losing money.
4. Yahoo Buys Geocities
In 1999, at the height of the Internet boom, Yahoo made another amazing acquisition, they thought. They dished out a mere $3.5 billion for Geocities. For those of you just starting out website creation back in 1999, Geocities was a free web host. At the time it was barely turning a profit, yet, we all had our heads in the clouds. Yahoo bought them the same year that they paid $5.6 billion for Broadcast.com. Today Geocities is barely alive, and far from turning a profit. They could have easily turned Geocities into a sort of social networking site like facebook or myspace, but you know how those Yahoo people operate.
5. @Home Purchases Excite.com
Also in the midst of the internet boom, @Home paid a staggering $6.7 billion for Excite.com. At the time it may have seemed like a good deal, considering Excite was #2 to Yahoo in internet portal traffic. I recall using excite as one of my main search engines back in the day. What happened since? Well it is quite amazing that they actually have users still. Now they are not even a search engine, they just use Yahoo, Google, and Ask.com’s data. They have a main portal page that resembles a 1999 version of Google Home, and continue to just barely survive with the help of Google advertising.
6. Terra Buys Lycos.com
In the midst of the Internet bubble collapse, this deal still managed to occur. Initially Terra, a relatively unknown company today, had agreed to buy Lycos for $12.5 billion. 6 months later when the final deal was struck, the sale price had fallen 60% to only $4.7 billion. Why? Because both company’s stock prices were crumbling before their eyes, as the internet bubble began to pop.. Today Lycos is nothing more then a second rate search engine that fills it’s results with ads.
No comments:
Post a Comment