Ideas & Debate
Uber could one day end up like Yahoo
Friday July 21 2017Yahoo started as a pioneer and wound up a mere holding company. Uber Technologies could be embarking on the same path.
In the heady days of 1999, Yahoo's market value soared beyond $100 billion. Last month, the company offloaded the last vestiges of its online business to Verizon Communications for $4.5 billion.
What's left under the rebranded $56 billion Altaba is stakes acquired long ago in Jack Ma's Chinese e-commerce goliath Alibaba and Yahoo Japan, along with about $11 billion of net cash.
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Meanwhile, legal and regulatory roadblocks keep piling up for Uber on top of a workplace-culture fiasco that has left the company, last valued at some $68 billion, without its co-founder and chief executive, Travis Kalanick, among other senior-level gaps.
As it struggles to preserve its app-driven ride service and build fledgling logistics and autonomous-vehicle businesses, Uber has begun rounding up positions in some promising far-flung markets, too.
It parlayed a cash-burning Chinese operation into a roughly 18 percent stake in rival Didi Chuxing last year.
That stake alone is worth around $8 billion based on a recent $5.5 billion Didi fundraising that valued the whole company at $50 billion.
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Earlier this month, Uber did something similar in Russia, abandoning cutthroat competition with local rival Yandex in favor of 37 percent ownership in a new combined service, a stake initially valued at well over $1 billion. The two interests add up to approaching $10 billion.
Meanwhile, Uber’s overall worth is declining. On the secondary market, it dipped to $50 billion in June, according to TechCrunch. It wouldn't be surprising if it's still falling following Kalanick's ouster.
A new fundraising in April for Lyft, Uber's primary U.S. rival, pegged its value at $7.5 billion. Suppose Uber's larger American business is worth twice that, and its China and Russia stakes soon appreciate by 50 percent.
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Ignoring Uber’s efforts in other countries, some of which eventually could become additional stakes, it would add up to a $30 billion company, with half the value already accounted for by minority interests. Extrapolate a few more years, and it’s not hard to see Uber becoming the next Altaba.
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