Yahoo
Sunnyvale, California, United States
Industry: Web portal and online services
Region: US 🇺🇸
Year Founded: 1994
IPO Date: 12-04-1996
Market Cap: $10.2 billion
Number of Employees: Approx. 8,600 (2017 data)
Revenue: $7.4 billion (2020)
Net Income: $5 billion (2023)
Yahoo! Inc.
Yahoo! IPO
Yahoo! Inc. made its initial public offering (IPO) on April 12, 1996.
The shares were priced at $13 each, but by the end of the trading day, the price had more than doubled to close at $33, giving the company a market value of $848 million.
The IPO was a resounding success and marked the beginning of a new era in the world of internet companies. Yahoo’s success story continued through the late 1990s and early 2000s as it expanded its services and grew its user base.
Yahoo! IPO Prospectus
A prospectus is a formal document required by and filed with the Securities and Exchange Commission (SEC) that provides details about an investment offering to the public. You can find Yahoo!‘s Prospectus here.
Company Overview & History
Yahoo! was founded in January 1994 by Stanford University electrical engineering graduate students Jerry Yang and David Filo. The website started as a hobby project, “Jerry and David’s Guide to the World Wide Web,” a directory of other websites, organized in a hierarchy.
In March 1995, the company was incorporated in California and in April 1995, it was incorporated in Delaware. Yahoo! was among the pioneers of the early internet era in the 1990s.
Over the years, Yahoo! expanded its portfolio to include various products and services, including Yahoo! Mail, Yahoo! News, Yahoo! Finance, and Yahoo! Search, among others. Despite facing stiff competition from Google and other tech companies in the 2000s, Yahoo! remained a major player in the internet industry.
However, it struggled in the following decade, and in 2017, it was acquired by Verizon Communications.
Financial Performance
| Year | Revenue($B) | Net Income($B) | EBITDA($B) | Operational Cash Flow($B) |
|---|---|---|---|---|
| 2016 | 5.17 | -0.21 | 0.59 | 0.87 |
| 2015 | 4.97 | -4.36 | 0.87 | 0.79 |
| 2014 | 4.62 | 7.52 | 1.09 | 1.33 |
| 2013 | 4.68 | 3.94 | 1.37 | 1.09 |
| 2012 | 4.99 | 3.95 | 1.42 | 0.95 |
| 2011 | 4.98 | 1.05 | 1.17 | 0.81 |
| 2010 | 6.32 | 1.23 | 1.48 | 1.26 |
| 2009 | 6.46 | 0.60 | 1.26 | 1.28 |
| 2008 | 7.21 | 0.42 | 1.81 | 1.90 |
| 2007 | 6.97 | 0.66 | 1.92 | 1.90 |
| 2006 | 6.43 | 0.75 | 1.92 | 1.81 |
| 2005 | 5.26 | 1.90 | 1.67 | 1.63 |
| 2004 | 3.57 | 0.84 | 1.25 | 1.21 |
| 2003 | 2.62 | 0.24 | 0.81 | 0.78 |
| 2002 | 0.95 | -0.05 | 0.29 | 0.28 |
| 2001 | 0.72 | -0.93 | 0.08 | 0.07 |
| 2000 | 1.11 | -2.76 | -0.41 | -0.39 |
| 1999 | 0.59 | -0.61 | -0.22 | -0.21 |
| 1998 | 0.20 | -0.10 | -0.04 | -0.04 |
| 1997 | 0.07 | -0.03 | -0.01 | -0.01 |
| 1996 | 0.02 | -0.01 | 0.00 | 0.00 |
Business Model
Yahoo! operates as a global media company with a platform that offers a wide array of services to users and businesses.
It generates revenue primarily through advertising, which includes display ads on its websites and targeted ads placed on other websites through its Yahoo! Advertising platform.
Additionally, it also generates revenue through subscription services, such as Yahoo! Mail Pro, and various premium content offerings.
Market Cap Over the Years
| Year | Market Cap($B) |
|---|---|
| 2022 | 49.6 |
| 2021 | 50.1 |
| 2020 | 51.7 |
| 2019 | 49.8 |
| 2018 | 47.9 |
| 2017 | 48.2 |
| 2016 | 44.9 |
| 2015 | 39.2 |
| 2014 | 40.3 |
| 2013 | 34.8 |
Risk Factors
As with any company, Yahoo! faces several risk factors. One of the primary risks is competition.
The digital advertising market is highly competitive, with major players like Google and Facebook dominating the scene. Yahoo!‘s ability to maintain and increase its user base and engagement is crucial for its advertising revenue.
Technological change and the need for innovation also present risks. Yahoo! needs to keep up with changing user preferences and trends in order to stay relevant.
Market Opportunity
Despite the challenges, Yahoo! still has a substantial market opportunity.
The global digital advertising market continues to grow as more businesses shift their marketing budgets online. Moreover, Yahoo!‘s vast suite of services, ranging from email to finance to news, provides multiple avenues for user engagement and revenue generation.
The company’s strong brand recognition and large user base can be leveraged to tap into these opportunities.
Competitors
- Microsoft (Bing)
- Amazon (Amazon Advertising)
- AOL
- Verizon Media
- Baidu
Key/Fun Company Facts
- Yahoo! is an acronym for “Yet Another Hierarchically Organized Oracle”.
- The exclamation mark in Yahoo!‘s name was added because a BBQ sauce company already had the trademark for “Yahoo”.
- Yahoo! once turned down an offer to buy Google for $1 billion in 2002.
- Yahoo!‘s logo didn’t have its final design until more than a year after the company’s foundation. The logo has been changed multiple times since then.
- Yahoo!‘s first ever television advertisement, “Do You Yahoo!?”, aired during the 1998 NFL playoffs.