Bidders line up for the potential break-up of Yahoo

3 Dec 2015

Several potential bidders for Yahoo’s core internet business have emerged, including Verizon/AOL, IAC/Interactive Corp and News Corp.

Private equity firm TPG Capital is also interested in buying some of the internet portal’s media properties.

The board of Yahoo are meeting this week to decide whether or not to sell off its various divisions, except for its stake in Chinese e-commerce colossus Alibaba, held under a vehicle called Aabaco.

Other potential acquirers of its core business include Alibaba itself, Japan’s Softbank, Comcast and Disney.

Yahoo under pressure

After three years as CEO, Marissa Mayer is under pressure to demonstrate a turnaround of the business.

The company is under pressure from investors to sell for around $4bn, while it has been signalled that the board are firmly behind Mayer to remain at the helm of Yahoo’s core internet business.

Reasons for the pressure to sell include a potential tax bill of $12bn from the spinoff of Alibaba, with Yahoo’s stake in Alibaba estimated to be worth around $32bn.

Activist investors Starboard Value have asked Yahoo to drop plans to spin-off Alibaba because of these concerns.

Once the darling of the early internet, Yahoo floundered and even messed up a massive takeover offer by Microsoft while new players like Google and Facebook began shifting the axis of the internet advertising world.

While in its heyday Yahoo’s portal, Yahoo Mail and various sports sites were the centre of the internet universe, others have filled that gap and, despite Mayer’s able stewardship and dedication, the battleship Yahoo just won’t turn fast enough.

In its most recent financial results, Yahoo had to forge a search deal with Google as revenues continued to slip.

Yahoo image via Shutterstock

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years