There was a recent buzz involving an acquisition involving Yahoo! Inc. (NASDAQ:YHOO) and Foursquare. The two internet giants were thought to have been in talks to sell Foursquare to Yahoo for $900 million. Today officials at CNBC reported that the news is not true and location based check-in app is not going to Yahoo. The rumor is thought to have originated from TechCrunch, which hinted that there was a possible deal in the pipeline between the two companies. However, the website was unable to name a source of the news.
Yahoo CEO, Marissa Mayer, has been concentrating company resources to build Yahoo as a mobile platform. Recent developments at the company in this regard have shown some promise and could be one of the reasons why the rumor gained so much popularity. The addition of Foursquare to Yahoo’s mobile platform has been considered as one of the biggest bets by the company. Some sources even went on to say that the deal is done. However, officials at Yahoo had refused to pass any comments about the deal, since they were simply not aware of the proceedings. Even the CEO of Foursquare, Dennis Crowley, had declined to comment on these initial reports.
The reports about Yahoo trying to acquire Foursquare are not new; they have been circulating around for some time, especially after the acquisition of Tumblr by Yahoo. The deal, however, made some sense for both companies. Foursquare has recently been operating in two with one app doing extremely well, while the other keeps falling. Additionally, Foursquare has been able to generate a meager $162 million in funding since last year, with the company being valued at $600 million by Microsoft. Yahoo on the other hand has been making a number of acquisitions under the new CEO, but is nearly flushed of cash after its dealings with Alibaba in China. The company is being seen as too focused on incremental iterations.
Yahoo! Inc. (NASDAQ:YHOO) closed at $45.73, gaining 0.45% on April 15. The company has 936.12 million shares being traded in the market, with a 52 week range of $32.64-$52.62.