Yahoo’s M&A Record Under Marissa Mayer
Yahoo has been on an acquisition tear since the company named Marissa Mayer CEO on July 17, 2012.
Since then, the Internet giant has acquired 35 companies. Exitround has done an analysis of Yahoo’s acquisitions since Mayer started, based on publicly-available data. In aggregate, Yahoo’s M&A activity spiked to $1.2 billion (fueled by the $990 million Tumblr acquisition) in 2013, up from $6 million in 2012 and $324 million in 2011 (largely due to the $259 million acquisition of Interclick), according to SEC filings.
Not surprisingly for anyone who has followed Yahoo, most of the company’s recent acquisitions have been talent deals. Yahoo’s stated goal is to stock its technical ranks with entrepreneurial teams brought in through acquisitions. Yahoo has been trying to build out Yahoo’s talent and bringing in startup teams has been one major piece of that strategy.
While many of the acquisitions are talent deals, a number of the acquirees have gone on to play important roles at Yahoo after the acquisition. For example, Jeff Bonforte, whose company Xobni was acquired by Yahoo last July, was in August named SVP of communication products, which includes Mail, Messenger, Groups, Contacts and Calendar. And previously Adam Cahan, whose startup IntoNow was acquired in 2011 by Yahoo, in November 2012 became head of mobile products, a key high-profile position within Yahoo.
Indicating how many of Yahoo’s acquisitions have focused on talent, we’ve found that 7 of the 35 companies acquired still have the product operating in some form in or outside of Yahoo after the acquisition.
Yahoo’s corporate development team has said that they are interested in hiring startup teams, focusing particularly on mobile. The numbers bear that out: close to half of the companies that Yahoo has acquired have been mobile-focused companies. A broad range of other types of consumer Internet or social apps were also high on the company’s wish list, such as ecommerce, travel, gaming and polling.
As most of the deals were talent deals, Yahoo’s acquisitions tended to be companies that have raised a relatively small amount of capital. The average funding raised by Yahoo’s acquired companies was $11.5 million (see graph above). If you exclude Tumblr, the average funding raised is $6.1 million and many raised less than $2 million–i.e. they were seed-funded companies. In addition, the average age of the companies that Yahoo has acquired is 3.1 years old.
Yahoo has tended to focus its acquisition efforts close to home. By Exitround’s count, 24 of the 35 Yahoo acquisitions were based in the San Francisco Bay Area. New York City was a distant second and the rest of the deals were elsewhere in California or in Seattle, Beijing, Canada or London.