Yahoo ‘to consider sale of Internet businesses’

Yahoo Inc. will consider selling the company’s core internet business, with the possibilities being discussed in a series of board meetings being held from Wednesday to Friday, the Wall Street Journal reports.

In a letter last month Starboard urged Yahoo to halt plans to sell the $22 billion Alibaba stake due to the risk of a $12 billion tax liability and because the holding along with Yahoo Japan accounts for most of Yahoo’s implied value.

The company has a hard time competing with market leaders like Google and Facebook, as it struggles to grow its advertising business. A sale of Yahoo’s core business would include such services as Yahoo Mail, as well as Yahoo News and Yahoo Search.

Reuters adds that hopes of a comeback, though, didn’t last, as Mayer’s strategy to push mobile, video, native and social media ads failed to increase revenue.

The Yahoo logo is shown at the company’s headquarters in Sunnyvale, California April 16. But Yahoo has $5.9 billion in cash and short-term investments on its balance sheet, as well as $1.6 billion in property and equipment (although it’s also carrying $1.2 billion in debt from convertible notes).

“And so are rumours that the board of the Silicon Valley internet giant is poised to sell off the entire core business”, she said.

Yahoo said that it will still proceed with the initial plan despite IRS’ refusal of its request.

The company’s future is being considered by the Yahoo board this week partly in response to a campaign by activist hedge fund and Yahoo shareholder Starboard Value, according to a Wall Street Journal article.

One potential barrier to a deal could be Yahoo’s 35% stake in Yahoo Japan and its 15% stake in China’s Alibaba Group.

Buying Yahoo! Inc. (NASDAQ:YHOO)’s core business at the moment is sure to come with its fair amount of challenges.

CNBC detailed that both net revenue and overall staff have declined in recent years.

Such a sale would mark an abrupt change of plans at the company, which has been trying to revitalize its business for more than three years under CEO Marissa Mayer, while spinning off the ancillary Asian investments in a transaction expected to close in January.

A separation of Yahoo’s Alibaba Group and Yahoo Japan stakes from the core business would unlock immediate value for shareholders and allow Yahoo’s core business to better recruit and retain talent, according to Starboard Value.