Yes, Verizon will Buy Yahoo! for under market — tech buyouts story—
We’ve always seen tech buyouts , for sure — ever heard of acqui-hiring? — but in the last few weeks, we’ve seen some huge ones with big repercussions. The first large-scale one was Microsoft buying LinkedIn for about $26.2 billion — which seemed over the market. Now we have Verizon buying Yahoo for about $4 billion — which seems under the market. (Yahoo’s market cap was once about $125 billion.)
So, what does all this mean?
Yes, Jasmine was part of one of these tech buyouts (circa 1999)
Before we get to that, let me tell you a little bit about my background. (Don’t worry; I’m not about to be self-promotional.) I worked as Director of Global Data Services at IBM, and I’ve also worked in digital for AT&T. This happened because I was actually absorbed into a series of tech buyouts (AT&T bought IBM Global Services for $5Billion – tech buyouts story). Sometimes I joke with people that I’ve been doing this since before SEO was a buzzword — and that’s a long time. I’ve seen the progression of the tech and telecom industries since the essential beginning of the Internet. At first, it was predominantly a commerce engine. Now we’re seeing it more as a content platform.
That’s the first question/wave with these buyouts: could content finally catch up, in terms of monetary value, to hardware/software? Think about it: Microsoft paid almost 7x for LinkedIn what Verizon paid for Yahoo. A big part of that is related to content from 433 million professionals. We just got news a few days ago that Salesforce would have outbid Microsoft for LinkedIn — and that’s big news, because Salesforce might get hit the hardest once LinkedIn becomes an integrated part of Microsoft Dynamics and other platforms.
Now it appears that content companies are continuing to increase in worth. You may see a world where bloggers, and multi-author blog sites, are driving up value and getting acquired. We’ve already begun to see that; remember when Turner bought Bleacher Report for about $175 million?
Yes, we will see more tech buyouts in many sectors
You’re likely going to see sports publishers, movie news publishers, celebrity publishers and other channels get scooped on. We’ve long heard that “content is king,” but it may be resonating financially now too.
Here’s one stretch implication of some of these buyouts and mergers: what if affiliate marketing begins to become more legitimatized? This has long been a challenge of content. Someone becomes popular because they have an unique, specific, and organic viewpoint. Then, because of a high follower count or page view count, a brand comes along and wants to tap them as an affiliate source. This works for some bloggers — a big example is Mr. Money Mustache — but in other cases, it turns off their initial audience, who doesn’t want to be re-routed to another site as a marketing ploy. If big companies can put their strategies and weight behind bloggers, though, affiliate marketing could be a bigger part of the marketing toolkit.
You could see the same concept happen with ‘influencer marketing’ too.
I think these buyouts are signaling the value of content in a straight-up monetary sense. We’ve seen YouTube and Vine stars be able to monetize themselves, but we haven’t seen it on the same scale with smart writers/bloggers. If anything, a lot of the writers/bloggers I know in various industries tend to work with people who want to keep their costs down and aren’t willing to pay for written content as much. What if we move beyond a focus on engagement metrics, though? What if we start really assigning dollar amounts to landing pages and specific blog posts, and what if that allows smart writers to become truly monetized?
Microsoft didn’t spend $26B for access to Joe Blow’s profiles. They spent it for content to bolster their already-huge ecosystem. Verizon didn’t spend pennies on the dollar for Yahoo’s Internet business to get a search engine that got lapped by Google over a decade ago. They did it for the content and content provider deals, in part.
Will we finally see content become a monetary king as more buyouts of this nature occur? Let me know your thoughts.