Yahoo – a pioneer of the Internet in the 1990s – said earlier this year that it would explore strategic alternatives, including selling its main Internet operations, after scrapping a longtime plan to spin off assets including its stake in Alibaba Group Holding Ltd.
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So far, Yahoo! has reportedly attracted the interest of the parent company of the UK’s Daily Mail, Verizon Communications, AT&T, Google’s parent body Alphabet, Time and Microsoft – but Verizon is now the front-runner and is expected to advance to the second round of bidding, according to Reuters.
Following Yahoo!’s (YHOO) earnings conference call this evening, during which CEO Marissa Mayer spoke with analysts and offered additional commentary about the ongoing review of “strategic alternatives”, the Street is just starting starting to publish their thoughts on the matter.
The current quarter EPS consensus estimate is.07 with revenue estimates of 1.06B. However, Yahoo is planning to close the deal by June but by looking at the pace of the company, it seems that it might have to extend the closure to few more months.
But the revenue fall was better than analysts’ forecast, and Yahoo’s shares rose in after-hours trading on Wall Street.
Backing Mayer following the flop of her previous turnaround efforts would only alienate investors further, says Mizuho Securities analyst Neil Doshi.
“Our 2016 plan is off to a solid start as we continue to focus on driving efficiency, lowering costs, and improving long-term growth”, said CEO Marissa Mayer.
The company’s shares rose almost one per cent to $36.66 in extended trading today.
Besides evaluating potential buyers – and trying to turn around the company’s finances – Yahoo and Mayer are facing a proxy fight for control of its board of directors.
At the end of 2015, Yahoo’s top executives said it would be looking to offload patents to raise revenue and shrink its costs by cutting its payroll.
The company is under vast pressure from its shareholders, mainly Starboard Value, to sell off its core business. Verizon Communications Inc (VZ.N) has put in an offer and is set to make a short list, according to sources.
“People have this attitude that Yahoo is a faded company”, he told USA Today. Daily Mail & General Trust Plc is still in talks with PE firms to become partners on the bid, the paper said. Yahoo is now in a proxy fight with Starboard for board seats, while Mayer has vowed to continue with her three year turn around plan.
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Mayer has made priorities of what she refers to as “Mavens” – mobile, video, native advertising and social media. Prior to taking the helm at Yahoo, she spent 13 years at Google.
