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Chart: The Rise and Fall of Yahoo

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Chart: The Rise and Fall of Yahoo

Chart: The Rise and Fall of Yahoo

The 20 year roller coaster for Yahoo finally ends

The Chart of the Week is a weekly Visual Capitalist feature on Fridays.

The saga surrounding one of the world’s most recognizable internet stocks has come to a close.

Yahoo has finally sold its operating business to the highest bidder. The winner was Verizon – and the price was $4.8 billion.

That’s worth less than 1% of the company it had multiple opportunities to buy: Google (now Alphabet).

What Happened?

Technology changes fast, and successful companies must leverage smart acquisitions in building for the future. Facebook bought Oculus Rift and Instagram, and Google bought companies like Youtube, DoubleClick, Boston Dynamics, and DeepMind to help flush out its strategy.

The executives running Yahoo have a rough track record in reading industry tea leaves. It’s not just about the deals they made, but it’s also the deals they failed to make.

In the end, a lack of execution with acquisitions proved to be the company’s Achilles’ Heel.

Missed Opportunities

In 1998, Yahoo was approached by two young Stanford Ph.D. students to buy their search engine algorithm. Larry Page and Sergey Brin had created PageRank – a quick way to find the most relevant website for a given search query. Yahoo skipped out on buying it for $1 million, rationalizing that it would take people off of Yahoo’s website, while decreasing traffic and ad revenues.

Even later on when Google’s search business was well-established, Yahoo CEO Terry Semel balked at Larry and Sergey’s $1 billion asking price. He would eventually agree to it, but by then it was too late. The Google guys had already decided to up their price to a heftier $3 billion.

Around that same time, Yahoo was turned down by a 22-year-old Mark Zuckerberg. Yahoo offered to buy Facebook for $1 billion, but Zuckerberg declined. This was a moment that billionaire Facebook investor Peter Thiel lauds as the major turning point for the company that allowed it to become the behemoth it is today. Some sources even say that if the offer was increased to $1.1 billion, that Facebook’s board would have forced Zuckerberg to take it.

But it’s not just the offers made that were missed opportunities. Yahoo also turned down a hostile takeover from Microsoft in 2008 for $44.6 billion that valued the company for far more than it is worth today.

Deals that Bombed

Finally, the deals that did close were unable to add any value to the company.

Yahoo famously made two acquisitions in 1999 that are now ranked by Forbes as some of the worst internet acquisitions of all-time.

The first was a $4.58 billion deal for Geocities, a site that enabled users to build their own personal websites. While Geocities was a pioneer in this regard, it eventually was shuttered in 2009 after failing to deliver any value to Yahoo shareholders.

The second was the famous $5.7 billion deal for Broadcast.com, an online television site that was founded by Mark Cuban. Perhaps way ahead of its time, internet connections were too slow in 1999 to run this type of video content off the web.

Yahoo also bought Tumblr for $1.1 billion in 2013. While it is not ranked as one of the worst acquisitions of all time, it is not doing particularly well either.

Yahoo’s Saving Grace

There was one M&A decision that wasn’t a whiff. In 2005, the company bought a 40% stake in emerging online retail company Alibaba. The remainder of those holdings, now worth $30 billion, make up the majority of Yahoo’s market capitalization today.

In the context of the recent Verizon deal, the Alibaba shares are likely being spun off into a separate investment vehicle.

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Technology

Visualizing AI Patents by Country

See which countries have been granted the most AI patents each year, from 2012 to 2022.

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Visualizing AI Patents by Country

This was originally posted on our Voronoi app. Download the app for free on iOS or Android and discover incredible data-driven charts from a variety of trusted sources.

This infographic shows the number of AI-related patents granted each year from 2010 to 2022 (latest data available). These figures come from the Center for Security and Emerging Technology (CSET), accessed via Stanford University’s 2024 AI Index Report.

From this data, we can see that China first overtook the U.S. in 2013. Since then, the country has seen enormous growth in the number of AI patents granted each year.

YearChinaEU and UKU.S.RoWGlobal Total
20103071379845711,999
20115161299805812,206
20129261129506602,648
20131,035919706272,723
20141,278971,0786673,120
20151,7211101,1355393,505
20161,6211281,2987143,761
20172,4281441,4891,0755,136
20184,7411551,6741,5748,144
20199,5303223,2112,72015,783
202013,0714065,4414,45523,373
202121,9076238,2197,51938,268
202235,3151,17312,07713,69962,264

In 2022, China was granted more patents than every other country combined.

While this suggests that the country is very active in researching the field of artificial intelligence, it doesn’t necessarily mean that China is the farthest in terms of capability.

Key Facts About AI Patents

According to CSET, AI patents relate to mathematical relationships and algorithms, which are considered abstract ideas under patent law. They can also have different meaning, depending on where they are filed.

In the U.S., AI patenting is concentrated amongst large companies including IBM, Microsoft, and Google. On the other hand, AI patenting in China is more distributed across government organizations, universities, and tech firms (e.g. Tencent).

In terms of focus area, China’s patents are typically related to computer vision, a field of AI that enables computers and systems to interpret visual data and inputs. Meanwhile America’s efforts are more evenly distributed across research fields.

Learn More About AI From Visual Capitalist

If you want to see more data visualizations on artificial intelligence, check out this graphic that shows which job departments will be impacted by AI the most.

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Voronoi, the app by Visual Capitalist. Where data tells the story. Download on App Store or Google Play

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