What Is Yahoo Net Worth?

Value of Yahoo

The problem is that the value attempts are flawed. Yahoo is an example of this. Take the bids for the company.

It is said that the company has offered $3.5 billion. AT&T, a consortium with Bain Capital and Vista Equity Partners Management, and a combination of Quicken Loans and Warren Buffet are bidding at least $5 billion. It seems like little for Yahoo.

The company brought in $5 billion in revenue last year, so all the bidders seem to be in the same boat, which means they discount intellectual property, customer relationships, and other aspects that might boost the price. Yahoo's value should be higher. If you wanted to own the company, you would have to pay at least that amount.

The acquiring company has to provide a premium above market price to get what they want. Yahoo is worth about $30 billion if you prefer enterprise value, which adds to the market cap of other interests. Wall Street says that Yahoo has nothing of value because the stock is priced to take into account the investments in Yahoo Japan and China.

It's crazy that the company has $5 billion in revenue, relationships with many advertisers, and one of the biggest online audiences, but nothing. It might be tempting to say that value is determined by what someone is willing to pay. That should be suspicious.

Yahoo Inc. Results from the First Three Months of Q2

Yahoo is still one of the top digital advertising businesses in the world and is worth a lot to potential buyers, particularly those in the telecom market who are looking to build out their ad tech portfolios. Yahoo's revenue was off 4% in the first nine months of the year, while the share price lost 34 percent. Analysts are expecting the company to report revenues of $1.19 billion for the fourth quarter, which is essentially unchanged from the year-ago period.

The company is expected to announce layoffs of up to 15 percent on Tuesday, along with division closures that will make the company more efficient and attractive to buyers. What kind of price tag are potential buyers looking at? Analysts agree that talks would start in the $4 billion range.

There are a number of entities that could benefit from the addition of Yahoo. In 2016 if the acquisition of the company by the other is successful, it will double down on the acquisition of AOL. AT&T and Softbank could buy Yahoo to keep up with the other companies.