With the announcement that Yahoo! has acquired Tumblr for $1.1 billion, many have expressed skepticism for Yahoo!'s ability to manage such a purchase. Based on the company's unfortunate acquisition history, the doubter's may have a point. Here are the 10 biggest blunder's in Yahoo! acquisition history.
When Yahoo! purchased Flickr (as well as its parent company Ludicorp) for $35 million in 2005, many users were bothered by the forced linking between Flickr and Yahoo! accounts. After the co-founders of the photo-sharing site left, they took with them most of the original engineering team as well. What once was a thriving Internet community of photo sharing has now become lost in the wake of Instagram and other more popular image hosting sites.
The Paris-based price comparison website Kelkoo was bought by Yahoo! in 2004 only to lose momentum and be sold off in 2008 to the private equity firm Jamplant for $126 million.
Delicious was purchased by Yahoo! in 2005. After a leaked video of a Yahoo! meeting suggested the company would be sold, fans of the popular bookmarking site began to flock to other sites such as Pinterist and Google Bookmarks. In 2011, Delicious was sold to Avos Systems, where it has received far more development and corporate attention.
Another acquisition that Yahoo! sold for well below the purchased price, HotJobs was an online job search engine that proved to be relatively popular until its competitors such as Indeed.com began to take market share. Purchased in 2002 for $439 million, HotJobs was sold to Monster.com for $225 million in 2010.
Among the ill-fated acquisitions, Yahoo! has had its own share of missed opportunities. Not only did Yahoo! decline the opportunity to purchase Google for a reported $5 billion in 2002, but the company also passed on the chance to license Google’s technology in 1998. Google is now worth a reported $198 billion.
Along with Google, Yahoo! also passed on purchasing the Internet’s other juggernaut: Facebook. In 2006, Yahoo! had the chance to buy the social network for $1 billion, but faltering stock prices shook the company's confidence. Yahoo! dropped the offer to $850 million, causing Mark Zuckerberg to walk away from the deal.
Launched in 2004, Webjay was designed to be a cutting-edge Web-based jukebox for the new millennium. It made it easy to build, share and watch playlists of audio and video links without forcing the listener to download anything. Yahoo! acquired the website on Jan. 9, 2006, but because of a general lack of interest the site was shut down a year and a half later.
In the heat of the tech bubble, Yahoo spent $4 billion for the Web-hosting service GeoCities. Founded in 1994, GeoCities was once the third-most visited website on the Internet. Yahoo! acquired the site in 1999, changing the terms of service and upsetting the site's users. Unsatisfied with the changes, users left in large numbers, causing the site to remain unprofitable for Yahoo! In 2009, Yahoo! abandoned its U.S. branch of the site and as of 2013 the site only offers Web hosting in Japan.
With its acquisition of Jumpcut.com in 2006, Yahoo! was hoping to capitalize on the rising interest in viral videos. The site was designed to provide free video editing and hosting services, but was officially closed in June 2009. According to Yahoo!’s official statement, the site was closed due to “ongoing prioritization efforts.”
One of Yahoo!’s most expensive, and disastrous acquisitions came in 1999, with the purchase of Broadcast.com. The company cost Yahoo! $5.7 billion and over a period of time, the various services of the Internet radio company were dissolved into Yahoo!’s main site. As a result, Broadcast.com no longer exists as a stand-alone website.