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How Yahoo’s multi-billion bids for Google and Facebook both failed
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By Hugh Fort in Business News, posted January 3, 2024
The world of business is littered with examples of big companies trying to buy out smaller or up-and-coming firms.
The most recent example of this is Microsoft's controversial takeover of Activision Blizzard, which has led to legal action around the world.
Sometimes, there have been opportunities for established companies to acquire other firms.
READ MORE: Why An Early Search Engine Passed On Buying Google For Just $750,000
For example, the search engine Excite had the chance to buy an early version of Google.
And the billionaire Ross Perot also turned down an opportunity to buy Microsoft because he deemed it too expensive.
But it's rare a chance a company initiates the purchase of two companies that went on to be multi-billion operations - and then fails.
But that's what happened with the search engine Yahoo, which has attempted to buy both Facebook and Yahoo in the early 2000s.
Yahoo's Facebook bid
In 2006, Yahoo approached the hugely successful social media company with a bid of £1 billion.
Facebook was just two years old at the time and had between eight to nine million users.
It had a revenue of around $20 million.
However, Mark Zuckerberg, Facebook's founder, turned down the offer.
He believed the company had a lot of potential and wanted to continue to build more products on the platform.
He was not happy with Yahoo's vision and felt it was undervaluing Facebook's potential.
He was at odds with board members Peter Thiel and Jim Breyer, who both thought he should accept.
However, he stuck to his guns, and made it clear he did not want to sell.
The move was ridiculed at the time, but Facebook - now known as Meta - has surged and now has a net worth of around $725.89 billion.
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Yahoo tries to buy Google
This move came before the Facebook bid in 2002.
The then-CEO Terry Semel started talks over the sale, which lasted for several months.
The talks ended after Semel decided Google's asking price of $5 billion was too much.
Google and its parent company Alphabet is now worth around $500 billion.
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