The Yahoo! board’s deliberations over selling its media and search business have prompted possible interest from entrepreneur Peter Chernin, sources say. 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.
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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.
Yahoo’s core services include Yahoo Mail, plus its news and sports sites.
Yahoo shares were up 7.5 percent at $36.25 at midday.
Hopes of a comeback crumbled as Yahoo’s plan to push mobile, video, native and social media ads – a strategy Mayer introduced in 2014 under the acronym Mavens – failed to increase revenues as desktop search ads continued to decline.
Currently, it is evaluating what to do with its 15% stake in Alibaba and 35% stake in Yahoo Japan.
SoftBank also owns 32% of Alibaba and 43% of Yahoo Japan and CEO Masayoshi Son has indicated he would prefer to remain a minority shareholder in both.
In more than three years at the helm, Mayer has made little progress turning around the company, whose revenue is forecast to drop 8 per cent in 2015. The sale of the company’s Internet businesses and spinning off the shares in AliBaba Group Holdings Ltd (NASDAQ:BABA) is expected to dominate the proceedings, which were already supported by investors.
Shares of Yahoo gained more than 5 percent on Wednesday following the report but gave back some of its gains on Thursday.
Since her appointment in 2012, chief executive officer Marissa Mayer has struggled to drag the internet giant out of a long period of stagnating growth, though she has brought some stability.
Yahoo had been planning to complete its spin-off of the Alibaba business later this month or January.
The Wall Street Journal reported yesterday evening that Google’s (GOOGL – Analyst Report) second fiddle Yahoo! Inc.
Chances are high Yahoo might end up holding on to its core business.
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The prospect of the US Internal Revenue Service taxing the Alibaba deal has also weighed on the stock.
