Yahoo to consider selling itself off before it collapses

Despite all the best efforts by CEO Marissa Mayer, it looks as though Yahoo may be nearing a decision to sell the company’s Internet services businesses completely, if reports on The Wall Street Journal are anything to go by.

Cowen & Co analysts estimated that Yahoo’s core search and display advertising business was worth $3.84bn, while Pivotal Research Group valued it at just $1.9bn.

In terms of its CEO Marissa Mayer, Yahoo is said to be losing faith in her plan to turn around the company.

Mayer hasn’t been able to revive Yahoo’s core offerings in the past three years.

The Yahoo board could also consider selling the company’s stake in China’s online retailer Alibaba.

A few private equity firms will likely be amongst those looking at the core business of Yahoo, said those familiar with the situation.

Most of the company’s value is tied to its stake in Chinese e-commerce giant Alibaba. Yahoo shares have declined 33 percent this year, and revenue is forecast to drop 8 percent in 2015.

Given Yahoo’s $30 billion ownership stake in Alibaba Group Holding Ltd (NYSE: BABA), some investors speculated that Alibaba could be a potential buyer of Yahoo’s segment.

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. Yahoo has said it wants to proceed with the deal anyway, and close it this month. According to sources, Yahoo has even faced huge setback behind its competitors like Facebook and Google in the battle for advertising dollars. That would mean investors are valuing Yahoo’s core business at less than zero if the Asian assets were spun out tax-free.

Yahoo runs several web properties including Flickr, Yahoo Finance, blogging platform Tumblr and fashion site Polyvore, as well as the messenger, mail and search functions it is known for. Earlier in October, Mayer promised to bring more focus to the company to fend off irrelevancy.

Reports of the sale got some favourable responses, with the market stock moving up by 7 percent in extended trading.