Yahoo’s core business, which includes popular services like Yahoo Mail and its news and sports sites, could attract private equity firms, media and telecom companies or firms like Softbank Group Corp 9984.T , analysts have said in the past.
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Yahoo was founded in 1994 by then-Stanford University electrical engineering graduate students Jerry Yang and David Filo.
Yahoo shareholders haven’t been incredibly thrilled with the Marissa Mayer-led company after three years.
Another interesting twist in Yahoo’s continued struggle arrived in November when activist investor Starboard Value asked the company to withdraw its plans to spin off its stake in Alibaba and instead reconsider selling its core search and advertising businesses. However, even if the spin-off of only the Alibaba shares does go through, it will leave Yahoo in a much weaker position than before and will likely make Marissa Mayer’s job in turning the company around a lot tougher. “If the company does sell, its future would depend entirely on the buyer”. Not only that, but people don’t change their email addresses and Internet habits all that fast which means that even though Yahoo’s core businesses are in decline, they remain substantial and may still be valuable to someone.
Given its stake in Alibaba, Yahoo’s strategic rethink raised the option for the Chinese company to come in and buy back its shares and, potentially, purchase other parts of Yahoo.
This could help Yahoo dodge capital-gains taxes on its investment in Alibaba, which was bought a decade ago for a billion U.S. dollars (£670 million) and is now worth 33 billion United States dollars (£22 billion) as the ecommerce business has boomed.
Yahoo was planning to complete the spinoff of its Alibaba stake, now worth more than $30bn, by next month, Ms Mayer said on the firm’s third-quarter conference call in October – later than a previous target of year’s end.
Yahoo was down almost 2% in midday trading in the stock market today.
Yahoo has declined to comment or report on the meetings.
“Meanwhile, net revenue has fallen from $5.4 billion in 2008 to a projected $4 billion this year, while headcount was at 11,500 in September, down 32 percent from when Mayer was hired in July 2012.”
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Verizon Communications Inc. (NYSE:VZ) and IAC/InterActiveCorp (NASDAQ:IACI) are some of the companies that have reportedly shown interest in Yahoo’s core business.
