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Verizon remains very interested in acquiring Yahoo’s Web business as an April 11 first-round bid deadline approaches, while other potential bidders, including AT&T and Comcast, have apparently dropped out of the competition for the company.
Google, at the same time, could be interested in bidding for Yahoo’s core business as well, according to an April 7 story by Bloomberg, which is based on unnamed sources familiar with the matter. Verizon is “willing to acquire the company’s Yahoo Japan Corp. stake to help sweeten the offer,” article said. “Microsoft Corp., which failed with a hostile bid for Yahoo in 2008, won’t bid this time, another person said.”
Other companies are also still eyeing a potential bid, Bloomberg reported, including Time Inc. and private equity funds Bain and others, “either alone or by backing a strategic acquirer.”
In February, reports indicated that Tim Armstrong, CEO of AOL, which Verizon owns, was leading Verizon’s interest in exploring a possible bid for Yahoo, according to an earlier eWEEK story. Verizon’s fascination with Yahoo centers on the 1 billion people who use its email, finance, sports and video services; its broad online content offerings and its heavy Web traffic. The wireless carrier, which already has about 112 million subscribers, would like to pair the businesses to grow its audience for a wide range of services that it offers.
Yahoo has been having a tough time in recent years. Earlier in February, Yahoo announced that it is cutting about 1,700 workers, or about 15 percent of its workforce of 11,000 full-time employees, as it works to scale back its operations and business units to cut costs, according to an earlier eWEEK article.
Yahoo was founded in January 1994 as Jerry Yang and David Filo’s guide to the World Wide Web, and then renamed Yahoo a year later. Yahoo reported fourth-quarter 2015 revenue of $1.27 billion, compared with $1.25 billion in the year-earlier quarter. Operating earnings totaled 13 cents a share, which squared with Wall Street forecasts. However, Yahoo investors earned 30 cents per share in the fourth quarter of 2014.
In search, Yahoo has continued to struggle since Google claimed market dominance 15 years ago. Yahoo captured only 2.1 percent of the $94 billion worldwide search market in 2015, and eMarketer said it expects the company to stay flat in that category this year.
Yahoo’s board launched an auction of its core business in February after it put aside plans to spin off its stake in Chinese e-commerce giant Alibaba Group Holding Ltd., according to an earlier eWEEK report. That $30 billion part of the Chinese retail giant was a deal engineered by co-founder Jerry Yang a decade ago and today serves as one of Yahoo’s biggest assets. The company also owns a major stake in Yahoo Japan.
Yahoo ostensibly is being forced by activist investors who don’t believe in its competitiveness anymore to sell off its main business and keep the corporate identity of Yahoo as a shell to manage the rest of its assets.
Marissa Mayer, who took the helm at Yahoo back in July 2012, has made many changes at the company—from banning employees in February 2013 from working from home to shuttering the AltaVista search engine in July 2013.
Mayer was brought in as CEO and president to try to put Yahoo back on track as a leading, growing and stable Internet company. She hailed from Google, where she was one of that company’s first 20 hires in June 1999 and was the company’s first female developer when it was just getting started.
Mayer was hired by Yahoo after an embarrassing and distracting string of three CEOs came and went in a seven-month span.