NEW YORK • In what might be the beginning of the end of a fabled Internet company, Yahoo has started a formal process that could result in selling all or parts of its business.
The company on Friday said its board has formed a committee of independent directors to consider strategic options while it continues to pursue a complex plan to split its operating businesses from its 15 per cent stake in Alibaba, the Chinese Internet company.
The move will allow potential bidders to examine its finances and decide whether to make offers for all or part of it.
More than a dozen parties, most prominently Verizon, have expressed preliminary interest in buying at least some of Yahoo.
Shares of Yahoo closed up 2.11 per cent on Friday.
Activist investors like Starboard Value have been pushing for a sale of Yahoo's core business, which includes its Web search, e-mail service, sports and financial news, and separately operated services like the Tumblr blogging network and the Flurry mobile analytics service.
Yahoo CEO Marissa Mayer has resisted calls for an outright sale. Instead, she has focused on trying to streamline and improve the core business while shaping a tax-free transaction to hand off the firm's US$25 billion (S$35 billion) stake in Alibaba to Yahoo shareholders.
But some investors have lost faith in Ms Mayer and her strategy. After 31/2 years as chief, she has shown little progress in fixing the 21-year-old company.
Mr Eric Jackson, managing director of SpringOwl Asset Management, is among those who have been pushing for radical change.
"Things are moving in the right direction, and we're happy about that," he said, adding that it was unclear whether the board would agree to any transactions.
Mr Jackson and other investors said they still expected Starboard to field a rival slate of directors for election at Yahoo's annual shareholders' meeting to keep the pressure on the board for a sale.
The board said it is "thoroughly committed to exploring strategic alternatives while simultaneously supporting management and the employees in their implementation of Yahoo's strategic plan".
Yahoo hinted it would be more interested in selling parts of the business rather than all of it.
"In addition to the reverse spin, there are strategic alternatives that could help us achieve the separation, while strengthening our business," Ms Mayer said.
Some Yahoo's divisions, like its small-business services unit, have been designated as tangential to the company's principal business.
Tumblr could be cleaved off and would be attractive to outside buyers - Facebook was keen on the New York-based blogging service before Yahoo bought it in 2013 for US$1.1 billion - but it also helps prop up Yahoo's weak use numbers, especially among youth.
Flurry, the mobile analytics business that Yahoo bought two years ago, also would be appealing. It is used by about 800,000 independent apps and would give a buyer an instant entry with software developers. But Yahoo has been integrating its ad sales technology with Tumblr, and unwinding that would be complex.
NEW YORK TIMES