Verizon's Buyer's remorse has gone too far [telecom]

Enough whining already, Verizon.

Verizon is steaming mad -- and with good reason -- that Yahoo maybe didn't disclose a tiny problem of a hulking cyberattack before Verizon agreed to fork over $4.8 billion to buy it. And now inside the corridors of Verizon HQ, executives are mulling whether Yahoo's lack of transparency about the hacking might be enough to jeopardize the deal.

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Reply to
Bill Horne
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As an aside, when Paramount bought Desilu studio, they were upset to discover that Star Trek and Mission Impossible were losing serious money on each episode. (Desilu claimed all data was presented to Paramount in advance). Anyway, Star Trek turned out to be a very valuable property, and even Mission Impossible generated a few future movies. Ironically, Paramount was mainly interested in Desilu for its real estate.

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These are almost opposite examples.

In the case of Desilu, Lucy had been putting a huge amount of money into producing episodic programs, knowing that she wouldn't get that money back from the networks airing them, but in the hopes that the syndication later on would more than make up for it. Star Trek was especially expensive, but she viewed it as a long-term investment.

If she'd been able to hold on to the company for another six to nine months when the first season syndication money started coming in on Star Trek, her monthly books would have been in the black again. But she wasn't able to.

Paramount knew exactly what they were buying... they were surprised to see the exact numbers and how far out on a limb Lucy was willing to go, but they sure understood they were buying a long-term cash cow.

Being able to knock that wall down between the two studios sure did make them happy though.

Contrast this with Yahoo which basically has no value. They don't have a large or dedicated customer base. They don't have much in the way of infrastructure. Even their IP space is poisoned and not worth much. By that I mean that so much of their space is blocked downstream because it has been a source of hacking attempts and spamming.

The name has bad associations with potential customers. There is absolutely nothing anybody would want because Yahoo has made no attempts to build real value for the future. You might as well just flush your money down the toilet and save some time.


Reply to
Scott Dorsey

Well, except for Flickr and Tumblr. And an email service that's still used by millions of customers. And a news service that still has some small brand recognition, particularly in business and technology news.


Reply to
Garrett Wollman

Often times corporations are quiet about the real reasons they want to buy out another company. If they suspect a hidden gem, they don't want potential other buyers to know about it, lest others drive the price up. Often they see potential growth in certain undervalued assets that merely need a fresh approach toward managing them. But it could equally mean dumping certain assets that are seen as having little future growth. (more below...)

As an aside, after WW II, many large companies began to look around for another company to buy or to branch out into a new service. Bell and IBM both had some thoughts but the consent decree blocked any more efforts, and kept each from competing with each other at that time.

I obviously can't speak for the players, but at the time, Star Trek had dismal ratings from its television airings. Television was very much a mass medium back then, and the fact that a small group of fans were very passionate doesn't translate into sales for the sponsors who usually wanted large audiences. Accordingly, I can't help but suspect Star Trek was not viewed as a worthwhile asset back then, that is, it wasn't expected to do well in syndication. (In lectures years ago, I've heard principals from the old show say that.)

Given certain circumstances, I can't help but suspect Lucille had tons of money to work with: First, Desilu didn't originate very many TV shows. However, its facilities were heavily used on a rental basis by other TV shows, and that brought in money. Secondly, Lucille was making great money from her Lucy Show, CBS paid her a great deal for it, so that was another good revenue source.

For what it's worth, the sources I read said that Paramount was basically interest in the real estate, either to use it for its own purposes or sell it off at a profit. As mentioned, given Star Trek's poor ratings, I don't think Paramount gave it much thought.

I don't know the details of what Verizon sees in Yahoo.

But recall when IBM bought Lotus. It didn't care about the spreadsheet, but rather wanted Lotus Notes. Today, IBM unloaded a lot of stuff, like its PCs and disk drives. (Personally, I'm not sure that was a good idea.)

Returning to Telecom, let's look at what AT&T hoped to get out of Divestiture: At the time, they felt the future was in long distance, networking, equipment, and networking. So they made very sure they kept their long distance network, kept Western Electric, and went out and bought NCR for its computers. They dumped what they expected to be losers--local service--on the divested companies. Well, as we all know, they guessed wrong, and one operating company ended up buying AT&T. Western Electric, which was perceived to be a crown jewel, withered away to Lucent.

One last thing--government policy changes over time. In the 1950s through the 1970s, both AT&T and IBM was under tight scrutiny and federal attack. But today, we had what once was illegal and unheard of--the Baby Bells merging and even acquiring an independent (GTE). A century ago Standard Oil was broken up, yet today two large parts, Exxon and Mobile, merged back together. Years ago, movie studios and exhibitors had to be separate, yet today Comcast owns both (NBC, Universal, and Comcast Cable.)

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