Clear Thinking and the Yahoo Saga

Yahoo went from $120 billion to $5 billion, while Google soared from $1 million to $1.85 trillion.

During a visit to Colombia at the beginning of the year, surrounded by family and clients, I stumbled upon a game-changing book, "Clear Thinking" by San Parrish. Little did I know that its insights would weave into the narrative of a tech giant's rise and fall.

Life, as Perrish eloquently puts it, is like a game of Tetris. Problems accumulate, and with a few bad decisions, your stack can crumble – job loss, business failure, financial loss, or the end of a meaningful relationship. Clear thinking, akin to cheat codes in the game of life, eradicates many blocks and keeps your problem stack low.

San Perrish's book unveils four decision defaults leading to life's problems: inertia, social, emotional, and ego. Inertia sticks to the status quo; social conforms to others' expectations; emotional follows impulsive actions, and ego prioritizes status over sound decisions. Unaddressed, these defaults shape destinies, even for corporations.

Inspired by these principles, I contemplated applying clear thinking to the world of investments. The story that unfolded took me back to the late '90s when Yahoo! dominated the internet landscape.

The Yahoo Saga

Once valued at over $125 billion, Yahoo! faced a pivotal moment in 1998. Google's founders, Larry Page and Sergey Brin, offered to sell their creation for $1 million, but Yahoo! dismissed the deal, blinded by the inertia and social hierarchy default programming described by the Parrish book. The tiny ant, Google, later became a tech titan.

Yahoo! attempted to rectify its decision over the years. In 2002, they tried to buy Google for $3 billion, but the deal fell through. In 2008, Microsoft's $40 billion acquisition attempt was rejected. Ego and emotional defaults played a role in killing these fantastic deals.

Fast forward to today, Yahoo! was sold for $4.8 billion to Verizon, seeking reinvention. Later, Apollo Global Management acquired 90% of Yahoo's stakes for $5 billion in May 2021, with 10% staying with Verizon. Meanwhile, Google evolved into a trillion-dollar juggernaut.

Yahoo!'s saga serves as a poignant reminder of missed opportunities, not due to talent or technology, but emotions and social programming dominating decision-making. The key to long-term success lies in modulating our default programming in decision-making. Clear thinking is a superb guide, offering invaluable lessons for navigating the unpredictable tides of business and life.

Warm regards,

Guillermo Valencia

Co-founder, Macrowise

?Crafting Wealth from Wisdom

Miami, 24th, 2024