At the end of the 1990s, Jerry Yang founded Yahoo! In 2007, he was appointed as the CEO of the company.
In January 2008, Steve Ballmer, the CEO of Microsoft, made a threatening call to Yang. This phone call eventually led to Yang losing his job.
Ballmer told Yang that he was tired of waiting for Yahoo to make a counteroffer in response to Microsoft's acquisition proposal. He stated that if Yang could not propose a counteroffer within two days, he would make Microsoft's offer public so "everyone could see what the investors thought."
Yang responded that he could not meet Ballmer's deadline for a counteroffer. He said, "Waiting a week won't cost you anything."
However, Ballmer disagreed with this view. The next morning, on February 1, 2008, Microsoft announced an offer to acquire Yahoo at $31 per share, which represented a 62% premium over Yahoo's then-current stock price.
Over the following three months, Yang took all possible measures to resist Microsoft's hostile takeover bid because he believed it undervalued Yahoo. Just a year earlier, in October, Yahoo's stock price had been at $33, higher than Microsoft's offer, and two years before that, it had reached $43.
Yang's most effective weapon at the time was the "poison pill" plan already adopted by Yahoo's board, which ensured that any employee laid off after a change in company control would receive an exorbitant severance package.
In the end, Ballmer and Microsoft raised their acquisition offer to $33 per share. It was reported that Yang claimed he wouldn't accept anything less than $37 per share. In May 2008, Microsoft abandoned its acquisition attempt.
Afterward, Yahoo's stock price plummeted. By November 2008, it fell below $10, causing Yang to lose his job. In January 2009, Yahoo hired Carol Bartz as CEO. However, under Bartz's leadership, Yahoo's stock price never exceeded $19. In August 2011, Bartz was ousted by the board.
For five years, it seemed like Yang had ruined everything, and Yahoo's stock price appeared unlikely to ever return to $33, Microsoft's final offer price. But on September 27, 2013, Yahoo's stock price hit $33.55, finally surpassing Microsoft's bid.
Ironically, much of the credit for Yahoo's recent stock performance should go to Yang. That's because it was Yang who, in 1996, co-founded Yahoo Japan with SoftBank, and in 2005 invested $1 billion in Alibaba Group. Today, some analysts point out that these investments account for up to 70% of Yahoo's enterprise value.
Another key figure in getting Yahoo's stock back above $33 was Scott Thompson, who briefly served as CEO after Bartz's departure. Despite holding the position for only a few months in the first half of 2012 before being ousted due to resume scandals and health issues, during this period, Thompson led negotiations with Alibaba Group, ultimately selling part of Yahoo's stake in the company for billions of dollars.
Since then, Yahoo has used the proceeds from selling its Alibaba shares to repurchase its own stock, thereby reducing the total number of outstanding shares.
In reality, this means that Yahoo did not increase the value of its core business to raise the stock's value. The recent rise in Yahoo's stock price is simply due to the reduction in the number of outstanding shares, meaning the stock price naturally increased when the market capitalization was divided by fewer shares.
That's why, when Microsoft offered $31 per share for Yahoo in 2008, the company's valuation was $44.6 billion; today, with the stock back at $33, the company's valuation is only $35.5 billion.
Of course, Marissa Mayer, Yahoo's current CEO, has also contributed to the company's revival. Specifically, she recently negotiated an agreement with Alibaba Group allowing Yahoo to hold more shares of the company after its IPO. Additionally, Mayer has convinced some investors that Yahoo has a bright long-term future.
But it must be reiterated that Yahoo's "semi-success" in its revival owes primarily to the person who left the company amidst ridicule back then.
That person is Jerry Yang, the visionary who, during Yahoo's glory days, wisely invested the company's capital into the nascent Asian internet industry.