Yahoo! Case

I found the Yahoo! Case a fascinating read. Here are a few thoughts on Yahoo!s history. First, I did a little research to find out what financing options Yahoo! decided to go with in 1995 after finishing their pepperoni and mushroom pizza. They decided to go with Sequoia Capital, which according to a Yahoo! Media Relations article I read, ended up proving Yahoo! with nearly $2 million in initial investment funding. This funding was in exchange for a 25% ownership share in Yahoo!. So, since I like numbers and inventing, I wondered how much Sequoia Capital could have profited from their funding of Yahoo!. Well, as of today's market close, Yahoo! has a $17.1 billion dollar market capitalization. That means Sequoia's investment of $2M is now worth $4.3B assuming they still hold their 25% steak in Yahoo!. In case you were wondering, that would equate to a 213,750 % return over sixteen years, or an average annual return of 13,359%! Not bad.

Another factor that made reading this case interesting is the fact that there is currently speculation that Yahoo might be the target of an acquisition bid from a company called Alibaba. The speculated acquisition price is said to be between $18 and $22 per share. If acquired at $18 a share, Yahoo! would be valued at $23.4B. Not bad for a tech start-up that was founded out of a trailer by two PhD candidates (needless to say, they chose to start Yahoo! over completing their degrees).