It is unclear what the board’s decision will mean for the future of Yahoo Chief Executive Marissa Mayer, who has pushed for the spin-off of the Alibaba stake but has not publicly commented on the possible sale of the core business. It is worth mentioning that its $32 billion market capitalization comes as a 15% stake in AliBaba valued at $32 billion and a 35% stake in Yahoo Japan valued at $8.5 billion.
Advertisement
The business isn’t attractive, “given the difficulties successive managers have had in turning it around”, WSJ reported on Thursday, citing a person familiar with the matter.
The executive board at Yahoo is now exploring a range of options on how to best manage a number of their Internet businesses, including the sale of web properties, with talks set to take place Wednesday through Friday, unnamed sources told The Wall Street Journal.
Starboard’s demand evidently prodded the board to consider an alternative way to avoid a tax bill that could wipe out more than two-thirds of the gain on Yahoo’s Alibaba stake, which was acquired a decade ago for $1 billion and is now worth $33 billion.
“And so are rumours that the board of the Silicon Valley internet giant is poised to sell off the entire core business”, she said.
“The company, once the first stop for many brands when spending ad budgets online, has been eclipsed by Facebook Inc. and Google Inc.”, reported TheWSJ.
Shares of Yahoo rose sharply Wednesday on the news. The firm is also one of three big wireless networks in Japan, and is also the largest shareholder in Yahoo Japan Corp., which is separate from the US company.
Yahoo’s internet business includes its popular services such as Yahoo Mail, Yahoo News and a few sports sites owned by the company. Brian Wieser from Pivotal Research Group said that the core business of the company was declining.
Microsoft offered to buy Yahoo for $44.6 billion (£30 billion) way back in 2008, but Yahoo refused to sell.
“That would mean investors are valuing Yahoo’s core business at less than zero if the Asian assets were spun out tax-free”. Yahoo has said it wants to proceed with the deal anyway, and close it this month.
Advertisement
Industry analysts point out that snapping up Yahoo’s internet operations would instantly make SoftBank a global player in the sector, notably widening its digital platform for entertainment and e-commerce outside of Japan.
