Re/code reported on Thursday that Microsoft is considering participating in an acquisition of Yahoo's core business, citing sources familiar with the matter. The story says those assets are deemed worth $6 billion to $8 billion, though Yahoo's board wants $10 billion.
Most of Yahoo's current value, of course, is wrapped up in its Alibaba stake, which it purchased in 2005 for $1 billion and is now worth close to $24 billion. Back in 2008, Alibaba "really hadn't flourished," Pyykkonen said, meaning Yahoo's core advertising assets were still seen as valuable.
One thing to remember when looking at Yahoo shares now versus then: Ignore the actual stock price. Monday's price of $35.20 is actually worth much less than the $33 a share Microsoft was willing to pay then, thanks to the magic of stock buybacks.
The company's aggressive repurchase plan means that Yahoo now has 946.8 million shares outstanding, down from 1.34 billion eight years ago. Yahoo said in its latest earnings call that during the new management's tenure, the company has bought back more than $9 billion worth of shares and "reduced diluted share count by over 20 percent."