Re:Verizon Explores Lower Price or Even Exit from Yahoo Deal
by jimmywanger on Thursday December 15, 2016 @01:44PM
(#13186996)
> So Verizon buys the company at 1x revenue
However, they are hemorrhaging money. You don't generally buy for revenue unless you're buying a small startup, where the growth rate is exponential and you'll become profitable once you hit economies of scale.
Yahoo has already ostensibly hit economies of scale, is stagnant in terms of growth, and is losing both money and eyeballs. What part of that is attractive to the balance sheet? You might not even be able to milk it to its demise, as it's currently unprofitable.
However, they are hemorrhaging money. You don't generally buy for revenue unless you're buying a small startup, where the growth rate is exponential and you'll become profitable once you hit economies of scale.
Yahoo has already ostensibly hit economies of scale, is stagnant in terms of growth, and is losing both money and eyeballs. What part of that is attractive to the balance sheet? You might not even be able to milk it to its demise, as it's currently unprofitable.