Yahoo's billion-dollar business deal that did not go as expected

Let's go back to the year 2013. At that time, Yahoo was still one of the leading companies in the technology and internet sector. However, the competition was pressing hard and Yahoo was looking for a leap in quality.

At that time, Marissa Mayer was the CEO of the company and now she has been the one to recount the blunder the company made that fateful year.

"We were looking for a transformational acquisition," recalls Marissa Mayer, in an interview for 'Tech Brew'.

At the time, Yahoo had capital to invest and three purchase options on the table: Netflix, Hulu, and Tumblr.

Netflix was the most expensive, in an operation that would have cost up to 4 billion dollars, but it meant entering the world of streaming with one of the most powerful companies in the sector.

The second alternative was Hulu. It belonged to Disney, Comcast and 21st Century Fox, it was also an on-demand content platform and its price was much more reasonable: 1.3 billion dollars.

"At that time we considered buying Hulu and, ironically, Netflix. Looking back, either would have been a better acquisition for the company," says Marissa Mayer.

In the end Yahoo would end up choosing to buy the third option: Tumblr. The free blogging platform, founded by David Karp (pictured), cost Yahoo $1.1 billion.

Yahoo's goal was to make their mark in the social networking industry but they failed miserably to monetize it.

The business was so ruinous for Yahoo that Verizon, a Yahoo subsidiary, would end up selling Tumblr to Automattic, a company owned by WordPress in 2019.

The price of the operation oscillates between the 10-20 million dollars that media such as Axios claimed, to the 3 million that The Verge pointed out.

Whether it was 3 or 20 million dollars, the difference with the 1.1 billion paid six years before was abysmal.

Worst of all for many analysts is that, after letting Netflix and Hulu escape, Yahoo tried to launch their own streaming platform: Yahoo Screen.

On this platform they bought 'Community' and made some series that, to be honest, nobody remembers like 'Burning Love' or 'Electric City'.

Obviously, the project was canceled and Yahoo's streaming venture would end up costing the company $42 million.

Of course, compared to the Tumblr operation, things were not so bad, since it cost them 1.8 billion dollars. And the worst thing is that, more than a decade later, those who performed the operation still don't know what the world Tumblr is.