Yahoo brings in 50 new companies, but will the company be able to retain its new staff?
Yahoo has been known as something of a dinosaur in the tech field with a reputation for hanging on to older, outdated products while competitors are bringing cutting-edge products to market.
But under CEO Marissa Meyer, Yahoo decided to bring new life into the old firm through a series of acquisition, according to the San Francisco Chronicle. In addition to adding new product, the company’s leadership intended to use the buying spree to add new talent, since the company was seen by many potential young tech employees as an older, less desirable company to work for.
Since Meyer took over as CEO, Yahoo has spent $2.3 billion in purchasing about 50 tech startups. But the acquisitions have yet to pay off, according to analysts, who point to the company’s declining stock price and loss of its senior leadership, including several founders of the recently purchased startups.
Along with the companies, Yahoo’s deals brought in about 100 top company executives and founders, 27 of whom have already left the company, according to the Chronicle’s research. Some analysts say that acquiring employees by buying companies is doomed to fail, since employees tend to leave shortly after the short-term perks meant to hold new staff run out.
Still, Yahoo maintains the long-term strategy is on track. Prior to Meyer’s arrival, the company had virtually no presence in mobile, video, social media and native advertising. Following the acquisitions, Yahoo recently counted $422 million in third-quarter revenues from those sectors, about a third of the company’s total revenues.
Acquisitions have resulted in new and imporved offerings from yahoo, including a new Yahoo News Digest, a LiveText app, and a revamped Yahoo fantasy football app that has helped Yahoo compete in the daily fantasy sports sector.
The company’s biggest acquisition was the blogging site Tumblr, which Yahoo bought for $1.1 billion, a deal which received mixed reviews from analysts, who say its too soon to tell if the purchase will pay off. Traffic on the site has increased by 56 percent, but Yahoo is unsure if Tumblr will bring in its goal of $100 million in revenue in 2015.
