Five Startups for $16 Million: Yahoo’s Mayer Is Buying Up Most Mobile App Companies on the Cheap
Because I get bored on Sunday nights, I opened up Yahoo’s recent regulatory filings for some light reading and, as usual, found some tasty information that the company had kindly dropped in for my erudition, but declined to call my attention to.
Namely, that the Silicon Valley Internet giant is paying not so very much for its mobile acquisitions, according to several documents the company has filed.
In fact, Yahoo’s average price paid for each of five of the 10 startups it has purchased since last fall is a tiny $3.2 million in cash.
For example, here’s last week’s 10-Q referring to three of CEO Marissa Mayer’s first acquisitions — content curation app Snip.it, which Yahoo bought in January (funding amount unknown, but the $10 million acquisition price reported by some sites is clearly wrong, as you will see from the filing); recommendation app Alike (funding amount unknown), which was on February’s menu; and recommendation app Jybe (funding amount unknown), which the company picked up in mid-March:
The Company did not make any acquisitions during the three months ended March 31, 2012. However, during the three months ended March 31, 2013, the Company acquired three companies, all of which were accounted for as business combinations. The total purchase price for these acquisitions was $10 million and consisted entirely of cash consideration, primarily allocated to goodwill. Goodwill represents the excess of the purchase price over the fair value of the net tangible and intangible assets acquired and is not deductible for tax purposes.
The Company’s business combinations completed during the three months ended March 31, 2013 did not have a material impact on the Company’s condensed consolidated financial statements.
Going back further, Yahoo’s purchase of recommendation app Stamped last October (it had $3 million in funding) and video-chat app OnTheAir ($880,000 in funding) in December were also on the cheap — a bargain at $6 million total — according to its 10-K filed a few months ago:
During the year ended December 31, 2012, the Company acquired two companies, which were accounted for as business combinations. The total purchase price for these acquisitions was $7 million. The total cash consideration of $7 million less cash acquired of $1 million resulted in a net cash outlay of $6 million. Of the total purchase price, $6 million was allocated to goodwill and $1 million to cash acquired. Goodwill represents the excess of the purchase price over the fair value of the net tangible and intangible assets acquired and is not deductible for tax purposes.
The Company’s business combinations completed in 2012 did not have a material impact on the Company’s consolidated financial statements, and therefore pro forma disclosures have not been presented.
It will be interesting to see what Yahoo reveals as to the price, and how it will account for the late March acquisition of Britain’s news reader Summly, which AllThingsD reported was a loftier $30 million.
The Summly deal did not appear to have closed by the end of the quarter, so no purchase information has been released, although it will be soon enough, along with that of the more recent string of mobile buys by Yahoo: To-do app Astrid, social polling app GoPollGo, travel rewards app MileWise and mobile gaming studio Loki.
For those four tiny companies, which were doubtlessly also bought for very little, Yahoo did tout what it’s really after in a festive tweet on Friday.
Warm entrepreneurial bodies:
— Yahoo! Inc.(@YahooInc) May 10, 2013