Yahoo May Sell Core Business, Boot Mayer

The business isn’t attractive, “given the difficulties successive managers have had in turning it around”, WSJ reported on Thursday, citing a person familiar with the matter. “This would appeal to global players, media companies, telecom participants and even some cable firms”. In fact, Re/Code is reporting that this week’s meetings are nothing more than annual board meetings that Yahoo always holds in December. Excluding the Alibaba stake, cash holdings and partial ownership of Yahoo Japan, Starboard valued Yahoo’s core business at about US$2 billion.

The board is mulling its options as growth continues to sag.

Yet, for years now, Yahoo has desperately sought a reason for existing. Also concerning investors is Yahoo’s slow momentum in digital advertising, which is the main way it makes money. Yahoo was once one of the most powerful websites on the Internet, but it has been overtaken in email and search by Google and beaten in Media by Netflix (NFLX) and Amazon (AMZN). Yahoo shares have declined 33% this year.

Yahoo’s stock price tripled in the first two years after Mayer joined a collapsing Yahoo in 2012.

Speculations are also pretty high on Yahoo’s selling of its stake in Chinese e-commerce behemoth Alibaba – which amount to a whopping $30Bn. Currently, it is evaluating what to do with its 15% stake in Alibaba and 35% stake in Yahoo Japan. “In its current conglomerate state, it’s very hard to do anything with Yahoo”. They will also decide, whether CEO Marissa Mayer should be given additional time to turn around the dwindling fortunes of Yahoo!

Yahoo CEO Marissa Mayer speaks during her keynote address at the annual Consumer Electronics Show. It is important to state that shares of Yahoo Inc. have been in a strong downtrend since the beginning of the year and have underperformed the broader markets. Some Wall Street analysts see it worth considerably less – but still more than zero. (NASDAQ:YHOO) seeks a buyer for its underperforming core Internet business. Instead, Starboard said Yahoo should sell its core internet search and ad business.

The people add that private equity firms are expected to be among those who will be looking at Yahoo’s core business.

“I think the U.S. Internet business is not so attractive for SoftBank at the moment”, noted Satoru Kikuchi, an Internet analyst at SMBC Nikko Securities. Mayer’s jump from Google to Yahoo was a game changer for the latter.