Ex-Yahoo CEO Marissa Mayer Regrets Buying Tumblr Over Netflix
Yes regrets — former Yahoo CEO Marissa Mayer talked about things she could’ve done differently during her time at the former tech giant in a recent interview with Tech Brew. And there are quite a few.
The funny thing was, Mayer was asked to name only “one thing” she would’ve done differently, but named several, including the decision to purchase the microblogging site Tumblr at a time when Yahoo was looking for a “transformative acquisition.”
“We looked at a transformative acquisition, and we bought Tumblr,” Mayer recalled. “At the same time, we were also considering whether it was possible to buy Hulu or, ironically, Netflix. And I think Netflix was $4 billion and Hulu was at $1.3 billion at the time. And either of those, with hindsight being 20/20, would have been a better acquisition.”
The company acquired Tumblr for $1.1 billion in 2013. Just three years later, the company acknowledge that the value of the blogging site had dropped by $230 million.
But Mayer’s first response was the hiring of chief operations officer Henrique de Castro, whom she did not name, instead of Lisa Utzschneider who became chief revenue officer. But the biggest mistake, she said, “is that we should have done the tax-free Alibaba spinoff to separate the assets of the company.”
The former CEO said that if Yahoo had done that, they would’ve saved $10 billion for shareholders, “or made them that money, whichever way you look at it, in taxes that were paid.” And it would have allowed the company to remain independent, potentially having more success.
“Now it is an independent company and privately held by private equity. But I’m not sure that the foray through Verizon was as helpful to some of the technologies and what they had to offer as it could have been.”
Mayer was Yahoo’s CEO from 2012 to 2017. These regrets are just some of the missteps that contributed to the decline of the former tech giant, but it also missed out on a few, potentially more transformative acquisitions before her time. Yahoo is pretty notorious for having missed out on quite a few chances.
Information for this story was found via Tech Brew, and the sources and companies mentioned. The author has no securities or affiliations related to the organizations discussed. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.