According to Swisher, Mayer still has the full support of the board, though that shouldn’t be too surprising since majority were picked by her. And she notes that Yahoo’s upcoming discussions shouldn’t raise any eyebrows because they’re nothing more than the usual board meetings that have always been planned for December.
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The Wall Street Journal reported that Yahoo is also weighing a spinoff of its stake in Chinese web giant Alibaba.
It is best to sell Yahoo’s Internet services, CEO Marissa Mayer has decided.
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. Excluding the Alibaba stake, cash holdings and partial ownership of Yahoo Japan Corp., Starboard valued Yahoo’s core business at about US$2 billion.
Comcast (NASDAQ:CMCSA), Verizon Communications (NYSE:VZ) and Barry Diller’s IAC/InterActiveCorp (NASDAQ:IACI) have been rumored as possible buyers. This time around, the Journal’s sources said that “private equity firms are expected to be among those taking a look at Yahoo’s core business”.
Yahoo’s desktop search ads continue to decline.
And SunTrust analyst Robert Peck reckons a sale of core Yahoo could net $6 billion to $8 billion in net proceeds. Such an amount of traffic is what many media and telecommunication companies are yearning for, seen as a flawless audience for advertising purposes. Yahoo has been overtaken in search and email by Google and beaten in media by Netflix and Amazon, while its messaging apps have lost users to Facebook and Snapchat. Despite the share price doubling under her tenure, the current level around $35 was hit in November 2013, less than a year and a half after Mayer took over.
Other potential acquirers of its core business include Alibaba itself, Japan’s Softbank, Comcast and Disney.
Yahoo is planning to complete the spinoff of its Alibaba stake, now worth more than US$30 billion, by next month, Mayer said on the company’s third-quarter conference call in October – – later than a prior target of year’s end.
Most of Yahoo’s $31.8 billion market capitalization is tied up in two large Asian assets, China’s reigning champion of e-commerce, Alibaba Holding Group Ltd (BABA – Analyst Report), and Yahoo Japan.
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However, Alibaba would only interested in buying back Yahoo’s 15% stake in Alibaba if it came at a big discount that increased earnings a share, the Journal added.
