Yahoo has spurned Microsoft's $44bn offer, claiming to
be worth more.
But how can a website that provides free services like
email and internet searches be worth so much.
Sure, Yahoo brings in money from web hosting, advertising
and some premium accounts, but it can't be worth more than
many auto manufacturers, can it?
How can Yahoo be worth over $50bn ?
Sure they provide some free stuff... But at the same time all they are spending money on is a tiny bit of electricity. Their employees... Some server equipment that you buy- once and every month after that it is returning revenue to you... And an Internet connection which they got at a premium when they first started up because they were at Berklee I think....
Anyway the Auto industry in the USA is losing out because they've been slow to bring about new technology in comparison to Asian manufacturers and also, there's a high cost of steel right now since China is consuming tons or raw resources globally (just like the United States during the early 1910s.)
Yahoo has deals all over the place.... They're backed by big companies including AT&T and Verizon that use Yahoo to provide content for their customers.
att.yahoo.com
verizon.yahoo.com
Plus British Telecom & Rogers Cable in Canada.
bt.yahoo.com
rogers.yahoo.com
etc......
Yahoo is worth alot because they command a large share of the "eye-balls" on the Internet. heck I mean Microsoft has tons of money and they can't even get many people to use Microsoft's horrible Search engine nor MSN internet service. MSNBC is a flop and I mean Microsoft WebTV2 is still out to pasture. Yahoo on the other hand has had more success in getting people to adopt their products.
Yahoo's price commands a lot- just like how a building in a good location could fetch a lot.
How can Yahoo be worth over $50bn ?
I've been asking this question myself. I hope somebody comes along and gives us a satisfactory answer soon.
How can Yahoo be worth over $50bn ?
$44Bil sounds awfully high. Per Yahoo's balance sheet, they have a total equity of around $9.5Bil and a net income of around $800Mil in 2007. It will take several years of that kind income to reach the $44.6Bil offer from MS.
I do not understand what MS stand to gain from this deal other than increasing their online presence.
