Yahoo! reported a $627 million win in a court settlement over an online lottery scam. The scam, propelled by a bogus Internet company, aimed to trick online users into believing they had won money prizes in a fake lottery sponsored by Yahoo!, the search engine giant.
There has been much speculation in recent months as to the future of Yahoo, Inc. The truth is that predicting the future of the former search engine giant can be difficult. But over the past year, Yahoo! has been pushing new initiatives to increase revenue. One such initiative will involve issuing new stock at the current price, and restoring operating power to former CEO Jerry Yang. This is quite a gamble, as Yang, who recently left Yahoo!, lead Yahoo! in a bad direction under his leadership. While issuing new stock will likely bring in more cash, the problem is that the company is not in desperate need of new cash, but in leadership that will take the company in the right direction.
As of September, the search engine giant reported $2.9 million in cash assets. The $627 million settlement gives the company a needed boost, as Yahoo! has struggled to stay ahead of the search game in recent years. This has a lot to do with the rise of social networking sites, and competitive search site, like Microsoft’s Bing.
The settlement comes at a key moment in Yahoo’s history, as the company is positioned to go in several different directions. On such offer on the table is from the Chinese eCommerce giant, Alibaba. The word on the street is that the China-based company is working out a bid for the entire company at $20 per share with the assistance of the private-equity firm, Blackstone & Bain. But the the bid has not materialized yet, which would indicate that the Chinese eCommerce giant will not make a bid at all. This is largely due to the fact that $25 billion in cash — the current asking price for the search engine company — is hard to come up with in today’s touch economic climate.
With all the turbulence in Yahoo’s future, this multi-million dollar settlement will go a long way to bolster the company’s improvement efforts. This is likely to include product development, search engine enhancement and perhaps efforts that would make Yahoo’s search platform more social. As the web becomes more and more social, it will be important for Yahoo to enhance their search engine’s social media capabilities. The $627 million settlement will help the search engine giant do just that.