No respite in Q1 from business slump: Yahoo

Ms Mayer said during a webcast on Tuesday that a review of potential suitors was proceeding at the "fastest responsible pace".
Ms Mayer said during a webcast on Tuesday that a review of potential suitors was proceeding at the "fastest responsible pace".PHOTO: AGENCE FRANCE-PRESSE

SAN FRANCISCO • Yahoo! Inc said its business continued to deteriorate in the first quarter, putting more pressure on the company to find a buyer quickly for its Internet operations.

Ms Marissa Mayer, Yahoo's chief executive, said during a webcast on Tuesday to discuss the financial results, that a review of potential suitors was proceeding at the "fastest responsible pace", but she declined to be more specific.

She also disputed news reports that the company was dragging its feet on a potential sale and refusing to share information with bidders.

"Let me be unequivocal: Our board, our management team and I have made the strategic alternative process a top priority," Ms Mayer said. "We've been responsive and engaging, having personally answered hundreds of questions and requests for information."

The first round of bids for Yahoo's core Internet business closed on Monday. Verizon Communications, the mobile phone carrier that owns AOL, was widely viewed as the leading contender.

COMMITTED TO SALE

Let me be unequivocal: Our board, our management team and I have made the strategic alternative process a top priority.

MS MARISSA MAYER, Yahoo's chief executive on the sale of its Internet operations

Bain Capital and Vista Equity Partners have submitted a joint bid, with Mr Ross Levinsohn, Yahoo's former interim chief executive, playing a major role, according to a person involved in the bidding process, who spoke on condition of anonymity because the bids were confidential.

A special committee of Yahoo's board is now expected to sort through the preliminary offers to decide which to pursue. The company did disclose that it paid its outside advisers US$9 million (S$12 million) during the quarter. Yahoo aims to close the sale by June, sources said.

Ms Mayer hinted that Yahoo would prefer a buyer like Verizon that could achieve "strategic synergies" as opposed to a purely financial buyer like a private equity firm.

Yahoo released its financial results on Tuesday. Profits after adjusting for certain items also narrowly beat projections. Revenue fell 11 per cent to US$1.09 billion, and the net loss was US$99 million, or 10 US cents a share, in contrast to revenue of US$1.23 billion and net income of US$21 million, or 2 US cents a share, in the same quarter a year ago.

Yahoo shares rose nearly 1 per cent to US$36.66 in light volume in extended trading on Tuesday.

Analysts were unimpressed with the results, but said that the company's exact financial results did not matter.

"The results should build a little bit of confidence for investors that the sale is going to be completed," said Mr Murali Sankar, an analyst at Boenning & Scattergood.

Yahoo, a leading content portal in the early days of the Web, missed the shift to mobile devices and has been struggling to compete against Google, Facebook and specialty apps for advertising dollars and user loyalty.

Ms Mayer, Yahoo's chief executive since 2012, has failed to turn the company around.

NEW YORK TIMES, REUTERS

A version of this article appeared in the print edition of The Straits Times on April 21, 2016, with the headline 'No respite in Q1 from business slump: Yahoo'. Print Edition | Subscribe