GeoCities Was All Monopoly Money – This Time It Is Real Money

May 20, 2013 1:54 pm

We spotted the terms of the Yahoo – GeoCities deal in 1999, and the Tumblr deal in 2013. Yes there are many similarities – but the most important difference – that Yahoo bought GeocCities mostly using its own (overvalued) stock – and is now buying Tumblr using cash – yes, that one thing that is generally difficult to come by – makes the two deals very, very different.

The GeoCities deal: “Yahoo, upon completion of the merger, will exchange about 10.6 million shares of Yahoo common stock for approximately 31.4 million shares of GeoCities common stock. Yahoo will also convert about 8.9 million GeoCities stock options into approximately 3 million Yahoo stock options.” (Source)

The Tumblr Deal: “Total consideration is approximately $1.1 billion, substantially all of which is payable in cash.” (Source)

Are we the only ones thinking “Why is Yahoo buying a monetization challenge for $1.1 billion?”

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