Do All Signs Point to the Sale of Yahoo's Internet Assets?
Is Yahoo about to sell itself? For all the speculation over CEO Marissa Mayer getting fired, a new wave of rumors is suggesting she may lead the Internet giant into the next journey of its evolution: a new owner.
Mayer (pictured) is taking a hit for Yahoo’s less-than-stellar stock market performance. The company’s stock is down more than 30 percent this year and her move to make investors happy by selling its stake in Chinese e-commerce giant Alibaba may not pan out in the end -- or at least not quickly enough to save her skin.
While some are calling for her resignation, others argue that she has done the best she could with what she inherited. Mayer did bring to the company a renewed focus on product innovation and driving user experience and advertising. But ultimately it may not be enough to preserve the company’s independence.
Who Might Buy Yahoo?
According to news reports, Yahoo’s board is meeting this week to talk about selling off some of its core assets. These supposed early stage discussions may result in the company putting Yahoo Mail, its many media properties and its advertising business up for grabs. That would leave it with the Alibaba stake and Yahoo Japan, which is a joint venture with SoftBank Group of Japan. SoftBank also owns Sprint.
Yahoo’s stake in Yahoo Japan is worth $8.5 billion and its 15 percent stake in Alibaba is worth about $32 billion. Selling off or spinning off those assets could put plenty of cash in Yahoo’s pocket that could allow the company to make another push with its U.S. operations. Yahoo could not immediately be reached for comment about the rumors.
The Wall Street Journal cited potential suitors for Yahoo’s Internet assets. Among them are Verizon Communications and IAC/Interactive Corp. Verizon has demonstrated its appetite for big moves. The telecom giant acquired AOL in May for about $4.4 billion to beef up its LTE wireless video and OTT (over-the-top) strategy.
IAC has gobbled up plenty of companies in its day, including a number of dating sites, as well as About.com, Lexico -- the owner of Dictionary.com, Thesaurus.com and Reference.com -- and Urbanspoon.
All Signs Point To Selling
We caught up with Greg Sterling, vice president of strategy and insight at the Local Search Association, to ask about the Yahoo sell-off rumors. He didn’t seem shocked by the speculation.
“With Verizon-AOL as a kind of model, I think there's considerable evidence that the board is exploring the sale of the company. There's a perception on Wall Street that Yahoo growth has stagnated and some investors are agitating for a sale,” Sterling said. “If the company does sell, its future would depend entirely on the buyer. Yet it's difficult to imagine Yahoo regaining significant momentum as a division of a larger entity versus as an independent company.”