Once an internet darling, portal site Yahoo has languished for years. While the company has mostly traded on its value as an Alibaba investment vehicle, due to the 10 percent stake Yahoo had in the Chinese ecommerce giant, it has failed to generate any meaningful new revenue producing assets.
This has finally caught up with the once-darling stock, as today Yahoo's market value was eclipsed by that of internet TV streaming giant Netflix.
Netflix has had a strong year thus far, beating both the S&P 500 index and old media companies. Its current market cap is $41.17 billion. Yahoo's sits just below this for the first time ever - at $39.56 billion.
Yet Yahoo will likely remain there from now on as Netflix is one of the great American internet giants of its time. Yahoo, by contrast, looks increasingly like an old media company from the days of portal websites that did everything.
The company, under lackluster leader Marissa Mayer, has engaged in tough financial management but has failed to innovate. Its now trying to copy Google in search, Netflix in video and AOL in content.
While Netflix dominates with hits like House of Cards, Orange Is The New Black and Daredevil, Yahoo has overpaid for NBC niche hit Community and the live broadcast rights to a third rate NFL game in Europe, in a vain effort to try and keep up with today's internet trend setters like Netflix.
“I’m not suggesting at all we’re going to be Netflix,” said Yahoo CFO Kenneth Goldman “But we do see video more and more in a way we think about how we’re going to grow our business."
It remains to be seen if this will be profitable growth, as Google, Netflix and host of others all recently declined the NFL's offer to stream its early morning football game.
The market, apparently, feels the same.