While Yahoo’s management has come under relentless criticism this year for its decisions and performance, there was a reminder today that it was making even more questionable judgement calls back in the last century.
Yahoo announced it had reached agreement with CBS Radio to take over the running of its 150 Launchcast internet radio stations from early next year.
Today they should all be playing funeral dirges for Yahoo’s 1999 acquisition of Broadcast.com for $5.7bn. Admittedly, this was an all-share transaction at a time of inflated valuations, but co-founder Mark Cuban was quick to cash in and invest elsewhere, making himself a billionaire in the process.
Broadcast.com was a YouTube prototype. As well as internet radio, it served video live and on demand, including user-generated content, full length movies and TV shows.
That YouTube potential was never realised by Yahoo’s management, which instead made a good job of value destruction. It chose to break up the service into Launchcast music and the Yahoo Platinum video service.
Platinum died a death some years ago and now Launchcast is being hived off to help Yahoo avoid the rising royalty rates for online music, according to Michael Liedtke of the Associated Press.
Broadcast.com currently redirects to Yahoo’s home page, but perhaps Yahoo could cede the address to CBS as well – with today’s deal and its acquisitions of last.fm and CNET, the media giant’s online broadcasting credentials seem much more impressive.
