One head is good: in Yahoo! discuss the possibility of selling the main business

Source: it-rt.ru

This week, December 2-4, Yahoo! is discussing the possibility of selling a 15 percent stake in the Alibaba Group , which is estimated at over $ 30 billion. In addition, experts do not exclude that the company can sell its own Internet division.

Amid this news quotes Yahoo! increased by 7% in electronic trading after the close of the exchanges.
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Yahoo! Internet business includes such popular services as search engine, Yahoo Mail, Yahoo News aggregator and sports sites. In the US, Yahoo’s resources are the third highest in attendance. In October, according to comScore, the total audience of these sites was 210 million. In this respect, Yahoo is second only to Google and Facebook. Yahoo’s core business may be of interest to private equity firms or IT companies.

Difficult manager

Reuters recalls that the strategy to promote mobile advertising, video and advertising in social networks, which Myers introduced in 2014, could not increase the company's revenue. Advertising revenue in the search engine 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. At the disposal of Yahoo will be the search tools for web pages and images, an advertising tool for AdSense for search. Google will pay Yahoo a percentage of revenue from adsense ad impressions. Yahoo, in turn, will pay for the use of web page and image search tools.

Yahoo has another deal - this time with Microsoft. It involved the transfer of all Yahoo traffic to the Bing search engine. However, Yahoo head Marissa Mayer (ex-Google employee) “knocked out” Microsoft’s rights to 49% of the traffic. For now, Bing has 51%.

These 49% will be transferred to Google, which is to be expected in this situation. Sometimes it seems that Mayer is still working for Google.

Investors criticized the purchase of Tumblr 's $ 1.1 billion blog service as an overpayment for an unprofitable project: the deal brought Yahoo's user base an additional 300 million people, but did not attract advertisers.

Forcibly cute will not be

For several months, dozens of top managers have left the company. To stop the mass leaving of employees, in August Mayer gathered a large meeting and asked top managers to sign an agreement according to which they should work in the company for at least another three years, told the Wall Street Journal two participants of the meeting. According to them, some top managers openly refused to sign such a document.

The authors of the American media agree that the CEO of Yahoo! Marissa Mayer has definitely become a difficult manager for her subordinates - Meyer’s micromanagement comes to a level where pixels are counted on web pages. As the Forbes editorial board notes, some industry experts believe that Mayer has long ago surrendered - and is waiting for an opportunity to leave the company. To survive, Yahoo! should be a service for video streaming, Meyer must be removed from his post, investor Eric Jackson believes.

All of these events and the controversial opinions of analysts have forced the board of directors to 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 investors ’valuing of the company's two Asian assets - shares in Alibaba and Yahoo Japan. In particular, the 35 percent share in Yahoo Japan is estimated at $ 8.5 billion. Thus, Yahoo’s own business is valued at zero or negative.

Maier has held a management position in the company for three years now, and Yahoo’s stock price dynamics are 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, quotes for both Yahoo and Alibaba at that time have dropped by about 45%.

Stormy optimization and uncomfortable assets

In 2005, the company Yahoo! acquired 43% of the company's shares, but on September 18, 2012, Alibaba Group completed the repurchase of 20% of its own shares owned by Yahoo!

On September 10, 2015, Megamind wrote that a deal on the spin-off of Yahoo’s Alibaba assets was in jeopardy. Alibaba’s plans for budding assets became known in January. Yahoo shareholders insisted on this. They also set a condition that the proceeds would not be spent on further mergers and acquisitions, but instead go to investors.

Usually, when separating a part of a business into an independent company, the firms request approval from the tax administration or from an external legal council. New company Aabaco was planned to be formed by the end of the year on the basis of a small division of Yahoo Small Business. The division provides web design services, hosting corporate sites and others.

Without such a unit, a new company could be regarded only as an investment tool. In this case, Yahoo will not be able to avoid taxation. According to US laws, asset budding is not taxable only if the new company has a real business, has a staff and earns income.

As noted by Yahoo, the tax administration has not come to an unequivocal decision that the transaction should be taxed. The transaction request has been withdrawn, Bloomberg reported . Recently, Starboard Value Investment Fund urged Yahoo to stop allocating a stake in Alibaba and sell its own core business in return.

Now, a deal with these assets in the previously conceived form is unlikely, therefore, now Yahoo will consider the possibility of budding its key business or selling it to a strategic buyer, says 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 permanently closed. In addition, the company will close the map service - Yahoo Maps . The same fate befell Yahoo Music , Yahoo Autos , Yahoo TV and other projects.

The company explains the closing of projects by changing the development strategy. The fact is that Yahoo! intends to focus on three main areas: search, digital content and communications. In this regard, the company is optimizing costs and freeing up additional resources, TechCrunch reported .

But if everything was so easily explained, the board of directors would not begin to waste time on meetings. Not too many companies recently rushed to optimize costs, change strategies and restructure business? Maybe sometimes under the “mask” of vigorous optimization hides something else? If the bottom of the ship is pierced and it sinks, is it worth it to throw out part of the crew in order to hold out longer?

Have something to remember

Yahoo! founded in 1994. In the late 90s, the company begins to grow rapidly. March 8, 1997 Yahoo! acquires portal RocketMail - one of the first free mail services. This is how the Yahoo! Mail. In addition, Yahoo! acquires services ClassicGames.com, which becomes the basis for Yahoo! Games, and eGroups, which later became Yahoo! Groups. Finally, July 21, 1999, the Yahoo! Introduces Yahoo! Messenger.

September 26, 2001 stock price Yahoo! reached its historic low - $ 8.11. Yahoo! became one of the few large Internet companies that survived the "dot-com crash." After emerging from the current crisis, Yahoo! took up the telecommunications market. June 3, 2002 Yahoo! and Southwestern Bell Corporation launched a national dialup service in the US market, and on August 23, 2005, in conjunction with Verizon, Yahoo! launches a nationwide DSL service.

At the end of 2002, Yahoo! starts acquiring other search engines - Inktomi, and in 2003 - Overture services, Inc., AltaVista and AllTheWeb. February 18, 2004 Yahoo! stops using google search technology and moves to its own.

In the years 2005-2006, Yahoo! launched Yahoo! Music, Flickr and Yahoo! 360 °.

On February 1, 2008, Microsoft sent its shareholders to Yahoo! acquisition proposal for $ 44.6 billion.

And who knows - perhaps today, December 2, 2015, the board of directors of Yahoo! He sits at the meeting and asks: was it worth it then to refuse the proposal?