1 February 2008: Microsoft bids $44.6 billion for Yahoo
Microsoft offered to buy Yahoo for $44.6 billion, a big premium, hoping to take on Google in search. Yahoo's board rejected the bid as too low, and Microsoft walked away a few months later. Yahoo then spent years shrinking. In 2017 Verizon bought its core internet business for less than $5 billion. Turning down a generous offer can look like confidence; in hindsight it looked like vanity.
The lesson: When a buyer offers far more than your business is likely to be worth alone, take it seriously.
What it meant for investors
$1,000 in Yahoo at the start of 2008 → $2,261 today, vs $4,626 in the S&P 500.
We start the clock at the start of 2008, the year it happened. That is 2.3 times the money, but $2,365 less than a plain index fund made over the same years.
What Yahoo teaches: Sometimes a company's best asset is a passive investment; for years the market valued Yahoo's core business at roughly zero once its Alibaba stake was counted.
| Bought in | Price then | Worth today | S&P 500 would be |
|---|---|---|---|
| 2008 | $23.00 | $2,261 | $4,626 |
| 2010 | $17.00 | $3,059 | $6,071 |
| 2012 | $16.00 | $3,250 | $5,312 |
green = beat the S&P 500 · red = lost money
What if you bought Yahoo? Every starting year and the full story →
More Yahoo history
- 12 April 1996: Yahoo goes public and more than doubles
- 25 July 2016: Verizon buys Yahoo's core for $4.8 billion
Could you have called it at the time? The wheel picks the year, you pick the position, ten seconds a pick.
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