Autocompleting your own death?! This screenshot is from April 2008, when Google’s search autocomplete was already suggesting “microsoft will buy yahoo” before the deal was even announced. Nearly two decades later, the whole episode reads as a time capsule from a very different web.
The Facts
Microsoft formally offered to buy Yahoo in February 2008: $31 per share, a 62% premium over the previous close, valuing the company at roughly $44.6 billion. Steve Ballmer’s letter to Yahoo’s board confirmed the two companies had been discussing a deal since late 2006, and framed it explicitly as a response to Google:
“Today, the market is increasingly dominated by one player who is consolidating its dominance through acquisition. Together, Microsoft and Yahoo! can offer a credible alternative for consumers, advertisers, and publishers.”
Yahoo never said yes. The board rejected the offer as undervaluing the company, talks dragged through the spring, and by summer the deal was dead. Ballmer walked, tried a partial acquisition of Yahoo’s search business, and that fell apart too. Yahoo spent the next decade shrinking, selling its core operating business to Verizon in 2017 for about $4.5 billion — roughly a tenth of Microsoft’s offer.
In hindsight, declining $31 a share is one of the most-cited value-destroying decisions in tech history. Jerry Yang and the board bet that Yahoo was worth more independent than inside Microsoft, and the market spent nine years proving otherwise. The autocomplete was right about what people were searching for. Yahoo just never wanted to hear the answer.