banking firms to evaluate potential bids for its
Internet operations in the clearest sign yet that
CEO Marissa Mayer may not have much more
time to turn around the struggling company.
The move announced Friday comes 2 1/2 weeks
after Yahoo disclosed it would consider “strategic
alternatives” while Mayer cuts costs through
mass layoffs, office closures and a purge of
unprofitable products.
Mayer believes the overhaul will boost profits
and sharpen Yahoo’s focus on mobile apps and
other services most likely to revive the company’s
revenue growth after years of decline.
Some Yahoo shareholders frustrated with
a steep drop in the company’s stock price
have been pushing for a sale of the Internet
operations instead.
The board has now responded to that pressure
by hiring investment bankers Goldman Sachs,
J.P. Morgan and PJT Partners to set up a process
for meeting with companies interested in
buying all or parts of Yahoo’s business. A special
committee of Yahoo’s directors will discuss the
options with the bankers and the company’s
legal advisers, Cravath, Swaine & Moore.
While the board mulls those alternatives,
Mayer will continue to pursue a turnaround
plan that includes jettisoning 15 percent of
Yahoo’s workforce.
“We believe that pursuing these complementary
paths is in the best interests of our shareholders
and will maximize value,” Yahoo Chairman
Maynard Webb said in a statement.
Mayer also is trying to spin off Yahoo’s Internet
operations into a newly created company while
leaving behind prized stakes in Alibaba Group, a
rapidly growing Internet company in China, and
Yahoo Japan. The proposed spinoff might not
be completed until next year, if Yahoo’s Internet
business isn’t sold before then.
Yahoo Inc. didn’t identify any of the
potential bidders that it might meet. Verizon
Communications has publicly said it might be
interested in buying parts of the company after
paying $4.4 billion last year to snap up another
fading Internet company, AOL Inc.
Analysts believe Yahoo’s other likely suitors
may include AT&T, Comcast and various private
equity firms that specialize in snapping up
troubled companies with well-known brands
such as Yahoo.
Virtually all of Yahoo’s current market value of
$28 billion is tied to its stakes in Alibaba and
Yahoo Japan. The holdings in Alibaba alone are
valued at $26 billion.
Analysts still believe Yahoo’s line-up of
still-popular services such as email, sports
and finance could fetch several billion dollars
in a sale.
Yahoo’s stock gained 62 cents, or 2 percent,
to close last Friday at $30.04. The shares have
plunged by 40 percent since the end of 2014.
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