ipernity: Group: New Flickr Survivors

Just when you thought it couldn't get more surreal...

Yahoo in its recent filing is showing Tumblr's goodwill value at $751 million:
money.cnn.com/2013/08/09/technology/yahoo-tumblr-goodwill/?hpt=ga_ns

Seven hundred fifty one million dollars. For "cool" factor.

And this for a company that was at the point of running out of cash.

And how much goodwill did they trash with the Flickr "upgrade?"

Ye gods. The world (or at least Yahoo) is mad.

Comments

Don Sutherland ^club

The goodwill valuation noted is merely the difference between the price Yahoo paid for Tumblr and the fair market value of Tumblr. In other words, Yahoo paid $751 million more than Tumblr's fair market value. The reality is that many acquisitions see prices paid well in excess of fair market value.

In the long-run, that can create to a loss of shareholder value. Once cost of capital is taken into consideration, that cost often exceeds the financial profits of the acquired firm. As a result, a majority of acquisitions (studies have shown around two-thirds) witness an erosion of shareholder value in the long-run.

11 years ago.

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