One head is good: at Yahoo! discuss the possibility of selling the main business
This week - from December 2 to 4 - the board of directors of Yahoo! discusses the possibility of selling a 15 percent stake in Alibaba Group , which is valued at more than $ 30 billion. In addition, experts do not exclude that the company can sell its Internet division.
Amid this news, Yahoo! grew 7% in electronic trading after closing exchanges.
Yahoo! Internet Business includes popular services such as a search engine, Yahoo Mail, Yahoo News aggregator, and sports sites. In the United States, Yahoo resources rank third in traffic. In October, according to comScore, the total audience of these sites was 210 million. In this regard, Yahoo is second only to Google and Facebook. Yahoo's core business may be interested in private investment firms or IT companies.
Reuters recalls that the strategy for promoting mobile advertising, video, and social media advertising that Myers introduced in 2014 failed to increase the company's revenue. Search engine advertising revenue continued to decline.
Earlier it was reported that the search engine Yahoo has entered into an agreement with Google. Now Yahoo will use its search and advertising. This became known on October 19. Yahoo will have tools for searching web pages and images, an advertising tool AdSense for search. Google will pay Yahoo a percentage of AdSense ad revenue. Yahoo, in turn, will pay for the use of web and image search tools.
Yahoo is bound by another agreement- this time with Microsoft. It provided for the transfer of all Yahoo traffic to the Bing search engine. However, the head of Yahoo Marissa Mayer (ex-employee of Google) "knocked out" from Microsoft the rights to 49% of the traffic. So far, Bing has 51%.
These 49% will be transferred to Google, which is to be expected in this situation. Sometimes it seems that Mayer still works for Google. Investors criticized the
purchase of the Tumblr blogging service for $ 1.1 billion as an overpayment for an unprofitable project: the deal brought an additional 300 million people to the Yahoo user base, but did not attract advertisers.
Forcibly sweet you will not
For several months, dozens of top managers left the company. To stop the mass departure of employees, in Mayer gathered a large meeting and asked top managers to sign an agreement according to which they should work for the company for at least three more years, two participants in the meeting told The Wall Street Journal. According to them, some top managers openly refused to sign such a document.
American media authors agreeis that the CEO of Yahoo! Marissa Mayer has definitely become a difficult leader for her subordinates - Mayer micromanagement reaches the level where pixels are counted on web pages. According to Forbes, some industry experts believe that Mayer has long given up - and is waiting for an opportunity to leave the company. To survive, Yahoo! should be a service for video streaming, Mayer must be removed from his post, investor Eric Jackson believes.
All these events and the conflicting opinions of analysts made the board of directors worry about the future of Meyer at Yahoo, as well as possible alternative business development strategies.
Yahoo's market capitalization ($ 31 billion) is mainly based on investor valuation of the two Asian assets of the company - shares in Alibaba and Yahoo Japan. In particular, a 35 percent stake in Yahoo Japan is estimated at $ 8.5 billion. Thus, Yahoo’s own business is rated at zero or negative.
Meyer has been in the company’s leadership position for three years, and Yahoo’s stock price performance is largely determined by the fate of its Chinese assets, which could bring billions of dollars to shareholders, the Wall Street Journal wrote in late September. Since the beginning of 2015, the quotes of both Yahoo and Alibaba at that time fell by about 45%.
Rapid optimization and inconvenient assets
In 2005, Yahoo! acquired a 43% stake in the company, but on September 18, 2012, the Alibaba Group completed the repurchase of 20% of its shares held by Yahoo!
On September 10, 2015, Megamind wrote that the deal on the allocation of Alibaba's Yahoo-owned assets was in jeopardy. Alibaba’s plans to spin off assets became known in January. Yahoo shareholders insisted on this. They also stipulated that the proceeds should not be spent on further mergers and acquisitions, but should be rewarded to investors.
Usually, when a part of a business is spun off into an independent company, firms seek approval from the tax office or from an external legal board. They planned to form the new company Aabaco by the end of the year on the basis of a small division of Yahoo Small Business. The division provides web design, hosting of corporate sites and others.
Without such a division, a new company could only be regarded as an investment tool. And in this case, Yahoo will not be able to avoid taxation. Under US law, asset spinoff is tax-free only if the new company runs a real business, has a staff, and earns revenue.
As noted by Yahoo, the tax administration did not come to an unequivocal decision that the transaction should be taxed. The transaction request has been withdrawn.Bloomberg reported . Recently, the Starboard Value investment fund called on Yahoo to abandon the allocation of a stake in Alibaba and to sell its own core business in return.
Now, a deal with these assets in a previously conceived form is unlikely, so now Yahoo will consider the possibility of spinning off its key business or sale to a strategic buyer, said Mark May, an analyst at Citigroup.
On June 5, Megamind wrote that Yahoo! was going to close several of his projects. One of them is Yahoo Pipes.. It allows you to create applications that combine news feeds, web pages and other services. Already on August 30, its functionality will be disabled, and on September 30, Yahoo Pipes will be closed completely. In addition, the company will close the mapping service - Yahoo Maps . Yahoo Music , Yahoo Autos , Yahoo TV and other projects have suffered the same fate to one degree or another . The company explains the closure of projects by a change in development strategy. The fact is that Yahoo! going to focus on three main areas: search, digital content and communications. In this regard, the company carries out cost optimization and frees up additional resources, TechCrunch reported .
But if everything could be so easily explained, the board of directors would not now waste time on meetings. Are not too many companies lately rushed to optimize costs, change strategies and engage in business restructuring? Perhaps sometimes something else is hidden under the “mask” of rapid optimization? If the bottom of the ship is broken and it is sinking, is it worth throwing part of the crew to hold out longer?
There is something to remember
Yahoo! founded in 1994. In the late 90s, the company began to grow rapidly. March 8, 1997 Yahoo! acquires the RocketMail portal - one of the first free email services. This is how Yahoo! Mail In addition, Yahoo! acquires ClassicGames.com services, which becomes the basis for Yahoo! Games, and eGroups, which later became Yahoo! Groups Finally, July 21, 1999, Yahoo! Introduces Yahoo! Instant Messaging Service Messenger
September 26, 2001 Yahoo! reached its historic low of $ 8.11. Yahoo! became one of the few large Internet companies that survived the “dot-com crash”. After overcoming the crisis Yahoo! took up the telecommunications market. June 3, 2002 Yahoo! and Southwestern Bell Corporation launched a national dialup service on the US market, and on August 23, 2005, together with Verizon Yahoo! Launches a nationwide DSL service.
At the end of 2002, Yahoo! begins acquiring other search engines - Inktomi, and in 2003 - Overture services, Inc., AltaVista and AllTheWeb. February 18, 2004 Yahoo! ceases to use Google search technology and switches to its own.
In 2005-2006, Yahoo! launched the services Yahoo! Music, Flickr and Yahoo! 360 °.
February 1, 2008 Microsoft sent Yahoo! shareholders $ 44.6 billion acquisition offer.
And who knows - maybe today, December 2, 2015, the board of directors of Yahoo! sits at a meeting and asks the question: was it worth it to refuse the offer?