SUNNYVALE (California) • Yahoo's board will consider a potential sale of the company's main Internet businesses in a series of meetings which were to start yesterday, the Wall Street Journal reported, citing people familiar with the matter.
The board will discuss whether to stick to its plan to spin off the company's stake in Alibaba Group or find a buyer for Yahoo's Web businesses, or both, the paper reported, without naming the people. Representatives of Yahoo declined to comment.
Chief executive officer Marissa Mayer had planned to complete the spin-off by January and promised to update investors on her strategy for the rest of the ailing Web portal.
Ms Mayer is facing renewed pressure from activist investor Starboard Value, which last month threatened a proxy fight if she does not make drastic changes to her plans, including selling the main search and display advertising businesses.
Starboard doubled its stake in Yahoo in the third quarter, after earlier selling part of its holdings.
In more than three years at the helm, Ms Mayer has made little progress turning around the company, whose revenue is forecast to drop 8 per cent this year. Yahoo shares have declined 33 per cent this year.
Most of the company's value is tied to its stake in Chinese e-commerce giant Alibaba.
In a letter dated Nov 19, Starboard estimated that Yahoo's enterprise value is US$31.2 billion (S$44 billion). Excluding the Alibaba stake, cash holdings and partial ownership of Yahoo Japan, Starboard valued Yahoo's core business at about US$2 billion.
Ms Mayer has been adding services for smartphones and tablets, new tools for advertisers and media content in a bid to attract audiences and marketers.
Yet, Yahoo has lost advertising market share in key areas such as mobile, where rivals such as Facebook and Google have gained ground. In October, Yahoo said it would update shareholders with a new strategic plan for the post-Alibaba era during its next earnings call, which is expected next month.
She has also lost several executives in recent months, including Ms Jacqueline Reses, Yahoo's chief development officer, who had shifted her focus this year to the Alibaba share sale. Mr Rob Barrett, who led media strategy, also departed, Re/code reported last month, citing sources it did not name. Ms Kathy Savitt, who had been Yahoo's chief marketing officer, left earlier this year.
Yahoo's core business could be worth about US$1.9 billion, not including about US$5.8 billion in cash expected at the end of next year, along with some growth assumptions, Mr Brian Wieser, an analyst with Pivotal Research Group, wrote Tuesday in a note. "Realising value is far from assured," he said. "Yahoo's core business is in seemingly permanent decline."
BLOOMBERG
