The discussions come at a time when Yahoo chief executive Marissa Mayer is under increasing pressure to boost performance and resurrect the company’s tumbling share price, which has fallen by 30 per cent this year. Mayer did bring to the company a renewed focus on product innovation and driving user experience and advertising. “There’s a perception on Wall Street that Yahoo growth has stagnated and some investors are agitating for a sale”, Sterling said.
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One potential barrier to a deal could be Yahoo’s 35% stake in Yahoo Japan and its 15% stake in China’s Alibaba Group.
In addition to its search platform, Yahoo Internet businesses include Yahoo News, Yahoo Mail and social media site Tumblr, among other holdings.
Yahoo has declined to comment or report on the meetings. Yahoo Inc.is struggling to keep its head above the waters due to competition from rivals like Google and Facebook.
Even though the CEO, Marissa Mayer, a former Google executive, tried to raise the popularity of Yahoo, she did not strike gold anywhere. Alibaba would be interested in buying its shares that Yahoo owns, but only at a steep discount, Wong added, citing a source.
A later report from Kara Swisher, who has a long history of reporting on insider Yahoo information, said Yahoo’s board is behind Mayer and doesn’t want to sell the core web business. As a result of the option of selling its core business, Yahoo’s stock has spiked more than 7 percent in trading, and more than 300,000 shares changed hands. Shareholders seem to care a whole lot more about the company’s stakes in Yahoo Japan and Alibaba.Mavens revenue in the third quarter jumped 43 percent year over year to $422 million, and Yahoo’s overall revenue climbed to $1.23 billion.
Analysts have tagged Yahoo!’s Web businesses with a $3.9 billion valuation.
Cantor Fitzgerald analyst Youssef Squali sketched out the three most likely scenarios for Yahoo, and concluded that a sale of Yahoo’s core business would deliver the biggest payoff.
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Yahoo had earlier planned to complete an Alibaba spinoff by the end of December. “Yahoo is expected to pull in 4.4% of the $58.12 billion US digital ad market in 2015, according to research firm eMarketer, down from 5.1% previous year”.
