Internet giant Yahoo will consider selling all or part of its core business, according to a report in the Wall Street Journal.
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The board at Yahoo will discuss selling the flagging core Internet businesses in a meeting that will be held this week. That has left the company in the awkward position of having its Alibaba stake valued at more than $30 billion, or nearly its entire $33.6 billion market capitalization. But, in the past 10 years, Yahoo struggled a lot to withstand its competitors and to find out the reason for its being.
A few private equity firms will likely be amongst those looking at the core business of Yahoo, said those familiar with the situation.
Lack of a long-awaited turnaround at Yahoo has put pressure on Mayer to prove she has what it takes to revive the faded Internet pioneer. Tigress Financial Partners CIO Ivan Feinseth told reporters that should Yahoo decide to sell its Alibaba holdings and Mavens units, it would probably be the end for the once popular search engine giant.
It still might happen if Mayer’s big bets on mobile applications and online video pay off and Yahoo gets the all-clear from the feds to use Google’s search technology to attract more traffic and sell more advertising. And Recode’s Kara Swisher downplays the original WSJ report and writes that the Yahoo board is actually going to be backing the embattled Mayer and focusing on the company’s planned Alibaba spinoff.
Marissa Mayer, president and chief executive officer at Yahoo. In an interview on Tuesday after news of the potential board talks was published, Jeff Bonforte, Yahoo’s senior vice-president for communications products, said employees were continuing to work on new products and features. Mayer came to Yahoo after a long stint at Google. The board will weigh all its options, and it is unclear whether the directors will change course, said the people, who spoke on the condition of anonymity because they were not authorized to publicly discuss the plans.
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The hedge fund, which claims to be a major investor in Yahoo, railed against the Alibaba sale after the U.S. tax authorities denied Yahoo’s request to confirm the transaction would be tax-free, leaving it open to a potential $12bn tax bill. Mail and search. But those efforts have largely failed to Yahoo’s image of a dog that’s had its day, and now Mayer could be about to do something much more drastic and sell off its Internet services altogether.
