Warren Buffett Wants to Buy Yahoo’s Internet Holdings

Who is Warren Buffett?

Warren Buffett is widely accepted as the most influential and successful investor alive today.

At different points in his life, he has been cited as the wealthiest person in the entire world.

As of 2015, he was ranked as the third wealthiest person in the world, continuously making new investments and restructuring his portfolio.

He is active in philanthropy, and he has famously pledged to give away 99% of his fortunes, leaving his children 1% to enable their future success. He is also known for being active in politics. He is the current chairperson and CEO of Berkshire Hathaway, a multinational conglomerate based in America.
Berkshire Hathaway owns

• GEICO
• Fruit of the Loom
• Dairy Queen, and many others

and it has smaller holdings in

• major financial institutions like Wells Fargo
• American Express
• major corporations like Coca-Cola.

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His Next Potential Investment Endeavor is Rumored to Be Yahoo and Holdings

Buffett has supported a consortium which is hoping to acquire Yahoo Inc.’s internet holdings.

Quicken Loans’ Dan Gilbert is among the members of the consortium.

Yahoo does not currently have as many internet users as its competitors, and many believe that Buffett’s support will give a much-needed attention boost to the company.

It is not clear if Buffett’s consortium will win in the bidding process.

However, it is giving a major dose of competition to Verizon Communications Inc., which is currently favored to potentially win in the upcoming bidding, currently in its second round. Buffett is helping to fund the bid offer.

Last month, in a Berkshire Hathaway meeting, it is rumored that Buffett spoke of how his company was lagging behind in investments in more modern new technology and lacked many holdings in the tech industry. However, he qualified this by saying that there was a lot wrong with the Yahoo corporation and that a lot needed changing in the company.

Susan Decker, a member of the Berkshire board, worked for Yahoo throughout the early 2000’s. 

She commented that the future owner should revamp the company in a way that is true to its original spunk and uniqueness while also keeping it competitive among tech investors.

What Other Groups Might Be In The Market To Bid For The Yahoo Internet Holdings?

Yahoo was worth over $255 billion in its prime, which was in the early years of the 2000’s. However, many roadblocks and poor business decisions along with many changes in leadership in a short time led the company to currently be worth only $35 billion.

In the last twelve months alone, its stock has declined by 20%.  

You would think that this would lead to a lack of interest among investors.

On the contrary, many different groups are putting in bids, which demonstrates that many businesses see a bright future for Yahoo. Many internet corporations are currently experiencing revitalization as they expand their roles in society, and it is likely that Yahoo will experience a similar phenomenon under the right leadership and management.

Yahoo also holds portions of Alibaba and the Japanese Yahoo, which are not part of the current bid.

Although the finances of the company are declining, it is still maintaining many users and acquiring new users, which also leads one to believe that the company could thrive under new ownership.

How Likely Is the Competition to Beat Buffett’s Group in the Auction?
Verizon’s bid is a favorite to win for a reason. The group has a massive backing with a lot of very wealthy companies willing to contribute cash to assist with the bid.

Verizon also owns AOL as a subsidiary, and the combination of these two tech and communications forces are likely to convince many to support their bid.

It is also rumored that they are willing to pay to bring Yahoo Japan back into the picture and pay a large sum of money for its acquisition.

The internet market in Japan is experiencing a huge boom, as the internet is becoming more and more essential due to the rise of personal smartphones.

What other Groups are Considering Bidding?

Microsoft has already expressed that it is not interested in Yahoo, and has not placed a bid.

SoftBank Group Corp. of Japan seems to be interested in bidding, but only for the Yahoo Japan portion, which is still not necessarily up for grabs.

Originally, the media had portrayed the sale to have an extremely large number of bidders, but it has recently become clear that there aren’t many competitors for this auction.

For example, there was a lot of media buzz about Sprint and General Atlantic placing major bids, but this claim never came to fruition. It is possible that Yahoo has been encouraging these types of rumors through internet news sites to generate more interest from bidders than it originally gained. Many bidders have also reported that the process has been lengthy and dissatisfying.