In addition, Alibaba would only be interested in repurchasing Yahoo’s 15% stake in Alibaba if it came at a steep discount that increased earnings per share, the person said.
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Yahoo’s board is understood to be considering the demands made by an activist shareholder for Yahoo to offload its core services instead of selling its stake in Alibaba.
The company is under pressure from investors to sell for around $4bn, while it has been signalled that the board are firmly behind Mayer to remain at the helm of Yahoo’s core internet business.
The company has a hard time competing with market leaders like Google and Facebook, as it struggles to grow its advertising business. 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.
Yesterday, Yahoo! Inc.’s (NASDAQ:YHOO) board members convened in one of several consultations planned for this week. Now, 20 years after its founding, Yahoo, which still has a billion people using its apps and websites, is an afterthought in many ad budgets.
The company’s emerging businesses, which Mayer calls Mavens – mobile, video, native and social advertising – have been the bright spot for the company.
The company’s board is now meeting amid a debate about the future of Yahoo. However, even if the spin-off of only the Alibaba shares does go through, it will leave Yahoo in a much weaker position than before and will likely make Marissa Mayer’s job in turning the company around a lot tougher.
Meanwhile, over the past 12 months, the value of Yahoo’s core business in the public market has gone from close to zero to negative , key executives have departed and outside consulting firms have entered the fray.
“To me that would be most valuable to sell”, said Ivan Feinseth, an analyst at Tigress Finanical Partners.
The company reported third quarter profits totaling $76 million in October, but that’s a significant drop from the $6.8 billion in profits Yahoo reported previous year.
While Yahoo’s share price has more than doubled and widely outperformed the broader stock market since Mayer took over as president and CEO in July 2012, much of the long upward trajectory was funded by an aggressive share buyback program and its stakes in Alibaba and Yahoo Japan (4689.T). While the board has yet to decide whether it will seek a buyer, a host of companies are expected to be interested should Yahoo directors choose that path. What would draw buyers, analysts and investors say, is primarily the company’s huge Internet audience and the billions of ad dollars they still draw.
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Mayer’s entry into the company brought high hopes to a workforce that had seen four chiefs in as many years.
