11 ms·

Yahoo Board to Weigh Potential Sale of Internet Business, Sources Say

• Analemma_ 11y ago
  Reminder: in 2008, Microsoft offered to buy Yahoo for $45 billion, and Jerry Yang turned them down. Whatever they get for the core business (which, as jonkee says, the street thinks is worth nothing), I'm guessing it's going to be a lot less than $45 billion. something something looking a gift horse in the mouth.
  • SilasX 11y ago
    Hindsight is 20/20.
    • dorfsmay 11y ago
      Exactly. Google has had similar offers...
      • jhall1468 11y ago
        Actually, Google was the one trying to sell itself to Excite. For $1,000,000. A board member talked the founders down to $750,000. CEO of Excite said no. It's now considered near the top of the list of worst decisions ever made by a CEO.
        • wtbob 11y ago
          I dunno though: was Excite even capable to let the Google-that-was turn into the Google-that-is?
          • talmand 11y ago
            I can almost guarantee you that if the deal went through then very few would know what Google is/was. Unless there was a brand change at the outcome of the deal. Even then, it wouldn't be the same.
            • jhall1468 11y ago
              His question was asking if Excite would have used Google's technology in such a way that they'd become what Google is today. There's no way anyone would know "Google" because Excite wasn't going to re-brand to a no-name.
              • wtbob 11y ago
                Exactly. Not only that, though, was Excite capable of building the culture which Google had/has, which (I believe) is one large reason it became what it is.
          • profeta 11y ago
            probably. the world only needed to decide on one search engine. it happened to be google. after the world set (for google, thanks more for universities putting search boxes on their sites, more than algorithms) they could do absolutely anything. launch free email with 1gb? disregard ads and only allow text ads? they did everything wrong by the book and are still huge. So i doubt excite could have screwed it up. well, they could have screwed the university fan-base... but that is about it.
            • dredmorbius 11y ago
              Is Search _really_ so positive-returns-to-scale that only a single player can exist? I mean, yes, Google's percentage of total Web search is embarassingly huge (north of 80%, or is it 85%, last I checked). But the user lock-in is slight. Advertiser lock-in is where I strongly suspect the action is, where Google offers both networks and tools which appeal to online ad buyers in a fashion that's difficult or impossible to match.
          • untog 11y ago
            I doubt it. For example, Excite already had an e-mail product, so I can't see them creating Gmail.
    • ipsin 11y ago
      I don't even think of this as hindsight. At the time of the offer, everyone I knew at Yahoo was incredulous, because the org seemed so dysfunctional. It felt like there were a few years lost, spent just injecting and removing tiers of middle managers.
  • sirkneeland 11y ago
    It's okay, at least Microsoft still got their chance to burn money on Nokia. ...so much money...
    • InclinedPlane 11y ago
      Offshore cash, same as the Mojang acquisition, practically funny money given the ratio of how much of it it's possible to keep when repatriating it to the US.
      • BillyParadise 11y ago
        "Anyone may arrange his affairs so that his taxes shall be as low as possible; he is not bound to choose that pattern which best pays the treasury. There is not even a patriotic duty to increase one's taxes. Over and over again the Courts have said that there is nothing sinister in so arranging affairs as to keep taxes as low as possible. Everyone does it, rich and poor alike and all do right, for nobody owes any public duty to pay more than the law demands." -- Judge Learned Hand (1872-1961), Judge, U. S. Court of Appeals
        • knughit 11y ago
          That quote is annoying to spam in general, more so when it isn't even relevant.
        • InclinedPlane 11y ago
          It's not sinister per se, it's just silly. And I'd say it's roughly 50/50 the fault of corporations and of the US government setting tax policy weirdly.
    • bkjelden 11y ago
      Microsoft could've bought 6.5 Nokias for $45 billion
      • sirkneeland 11y ago
        Or ~1 Nokia for what it was worth before Stephen Elop ran it into the ground. (I don't buy the conspiracy theories that Elop was a Microsoft mole sent in to do exactly that. I never attribute to conspiracy what can be attributed to staggering incompetence)
  • pbreit 11y ago
    Well, the Alibaba part is worth $30b+. Yahoo Japan another $10b. So the world's third (or 4th or 5th) largest internet property would only need to be worth $5b to "break-even". Thanks for the reminder!
    • HiLo 11y ago
      It's only worth that if somebody pays that, which would be who in this case?
      • jayess 11y ago
        I wouldn't touch an Alibaba investment with a ten foot pole, at least not on any medium- to long-term basis. They would be smart to sell that off.
        • HiLo 11y ago
          Why's that?
    • thejosh 11y ago
      Why is Yahoo Japan worth so much?
      • rtpg 11y ago
        Because Yahoo Japan is pretty popular in Japan, and they offer a lot of relatively successful services. Not that it's ginormous, but for example, eBay never really happened in Japan because Yahoo Auctions was already a thing. Yahoo Japan also runs an ISP
      • patio11 11y ago
        Revenue for the fiscal year ending 3/31/2015 was ~$3.5 billion; EBIDTA $1.8 billion. 70% attributable to advertising. Like most large Japanese Internet companies they have a bit of an empire building complex going on, and do everything from running the local equivalent of eBay to selling ISP service.
      • 11y ago
  • InclinedPlane 11y ago
    Yeah, that deal would have been great for Yahoo and terrible for Microsoft. It's funny how history works out.
  • guelo 11y ago
    Microsoft has probably burned in that neighborhood to get Bing to where it is now, they probably would have been better off if they had been able to close that $45b deal.
    • ekianjo 11y ago
      They burned a lot of money for sure, but close to 45 $B? No, probably not.
    • mrcwinn 11y ago
      Having no citation or inside knowledge, I can say for certain they did not spend $45 billion to develop, market, and grow Bing.
    • smt88 11y ago
      That's an unreasonably high estimate, and there is some data to support the idea that it's unreasonable[1]. Microsoft has been losing, at most, a few billion[2] a year on Bing. Assuming they've spent $45B since 2009, that's $6.4B per year spent on Bing. A net loss of $2B on Bing would mean Microsoft is making $4.4B per year, which isn't in the ballpark. 1. http://www.businessinsider.com/chart-of-the-day-microsoft-online-operating-income-2012-10 http://www.businessinsider.com/chart-of-the-day-microsoft-on... 2. http://hal2020.com/2013/01/18/about-that-2b-annual-loss-from-microsofts-search-business/ http://hal2020.com/2013/01/18/about-that-2b-annual-loss-from...
      • guelo 11y ago
        Even if the real number is only in the $20-30B range I'd still consider that "in the neighborhood" as I said. And they would have had a much stronger start by not having to build a brand from scratch.
        • smt88 11y ago
          I take your point, but I want to add a couple more things. Buying a company costs a lot more than the purchase price. Due diligence, regulatory compliance, legal expenses, HR expenses, lost productivity due to changes, employee turnover, and other factors put a huge premium on top of that price. Plus, a company that you buy has its own cash-flows, assets, and liabilities, and those might be costly, too. It's not always a good idea to buy a ship that's slowly sinking. I think Microsoft has done incredibly well without Yahoo, and it's also using Bing in interesting ways that don't require direct competition with Google (powering Cortana, for example).
  • radicaldreamer 11y ago
    Generally, acquisitions are a good deal in monetary terms, but that's really not what companies are looking for at the time. Remember, the thing that got these companies to that spot are not an affinity to sell to another.
  • jackgavigan 11y ago
    Reminder: Yahoo invested in Alibaba in 2005.
• jonknee 11y ago
  Wall Street was valuing the web businesses as worthless so this should be interesting (Yahoo's total market cap was about equal to its remaining stake in Alibaba). Shares are up 5% after hours on the news.
  • speeder 11y ago
    Actually many times Yahoo had negative valuation (ie: Yahoo market cap was lower than Yahoo shares in Alibaba, thus if you discounted Alibaba value, Yahoo had negative value).
    • sixQuarks 11y ago
      They have a lot of employees to feed with a dying web property.
    • jonknee 11y ago
      There are still big tax issues with the Alibaba stake so that definitely has something to do with it. If they can get it to be a tax free spin off the value should increase quite a bit.
    • deleted 11y ago
      [deleted]
  • HiLo 11y ago
    Or just as not worth more than the trouble they're bringing to this whole ordeal, when viewing it all as a portfolio of assets. (referring to the core biz)
• jacquesm 11y ago
  Nice to have a board that leaks like a sieve.
  • rdtsc 11y ago
    Agile board!
    • jacquesm 11y ago
      Move fast and break stuff...
  • adharmad 11y ago
    Can't be worse than HP board
    • jacquesm 11y ago
      Possibly. But this is a bad sign for Marissa Mayer, if the board is acting out-of-order like this her days are probably numbered, it's a sign of pretty strong dissent. Someone (or multiple someone's) is trying to force her hand.
      • colmvp 11y ago
        There are a lot of stories implying that she's lost a lot of confidence. C-levels/VPs, including those she brought on, leaving for reasons that include lack of direction. Low morale amongst employees which has resulted in outcries against managers. And then of course her strategic decisions have not yielded growth.
        • adharmad 11y ago
          After multiple CEOs in the last few years, it would be interesting to hear an impartial insider's analysis on what went wrong. Marissa Mayer came with decent creds, a sizable runway and support from both the board and employees alike (at least in the early days). Why is she unable to make any progress? Was it just a better support circle @ Google or just unlucky and bad decisions?
• jbrad7354 11y ago
  What are they without the "internet business"?
  • 762236 11y ago
    Compelling investments in Alibaba and Yahoo Japan.
    • jbrad7354 11y ago
      Yes, but what's the point of existing? Sell the investments, return money to all shareholders. Bye bye Yahoo.
      • snissn 11y ago
        The investments would be the point of Yahoo existing, the company would just be a stakeholder of other companies.
      • harryh 11y ago
        If they sell the investments they have to pay taxes on the gains. These tax issues are the driving force behind everything going on at Yahoo right now.
  • jonathankoren 11y ago
    "little more than a holding company for its Alibaba shares." via http://www.theverge.com/2015/12/1/9832780/yahoo-considering-sale-of-internet-business-report http://www.theverge.com/2015/12/1/9832780/yahoo-considering-...
• pbreit 11y ago
  This is the third #nottheonion article today. "Ford considers selling off car business".
  • rmason 11y ago
    Where did your read that? It would be really huge news here in Michigan.
    • nkozyra 11y ago
      I think the joke is "isn't that all they do?" Obviously it's not true for either company. Like any corporation that big the revenue sources are diverse.
      • rmason 11y ago
        Well in the case of Yahoo I think that it is only a matter of time. You could buy Yahoo, sell the shares in Yahoo Japan and Alibaba and end up with Yahoo for free and have a couple of billion dollars in the bank to boot. This is a takeover artists dream deal.
• SCAQTony 11y ago
  They have a robust delivery platform. I have no idea why they don't hire a notable CEO and entertainment team snatched from the entertainment industry and start producing content like Amazon.
  • hackaflocka 11y ago
    Upvoted.
  • JulianMorrison 11y ago
    Because Amazon. (And Google, Hulu, Netflix...) You don't break into a mature market unless you have money to burn.
    • loceng 11y ago
      They own a huge marketing channel. You need some money and to fund just a few good producers to get the ball rolling.
      • arfmancomes 11y ago
        Oh maybe they should bring back a beloved show shot down by networks. Has anyone actually used yahoo screen?
        • cpeterso 11y ago
          Yahoo! Screen revived NBC's Community sitcom for a sixth season, but lost a lot of money: https://www.yahoo.com/tv/bp/community-season-6-yahoo-204612640.html https://www.yahoo.com/tv/bp/community-season-6-yahoo-2046126...
        • wjoe 11y ago
          I wanted to, and tried to use it to watch the new season of Community that they made. Thanks to region locks, dated technology, ads, and a generally awful website, I gave up.
  • 11y ago
• mydpy 11y ago
  Bah paywall.
  • shawndumas 11y ago
    scroll to the top and click 'web'
    • mydpy 11y ago
      Yeah, thanks. I was impatient last night. :-/
  • oh_sigh 11y ago
    open it in incognito mode
• jordache 11y ago
  oh no! please keep yahoo yql finance api up and running! i need that data feed
  • Nicholas_C 11y ago
    Yahoo Finance is the only reason I ever go to Yahoo. I feel like they could beef up their finance news and products and do something with that.
• colmvp 11y ago
  > Activist investor Starboard Value LP last month called on the company to halt its Alibaba spinoff and instead find a buyer for its Internet business. In a letter to Yahoo, Starboard said its position changed following the federal government’s decision not to rule on whether the Alibaba spinoff would incur billions of dollars in taxes. Does anyone know anything about Starboard Value LP? What is an activist investor? The term itself screams adversarial. Do all CEO's have to deal with this? I can't imagine having to both plan how to pull a company out of the water and have to deal with people outside of the company who think they know better.
  • akg_67 11y ago
    I am well-aware of Starboard Value LP. The hedge fund is behind combination of Office Depot and Staples, changes at Olive Garden, etc. They are activist investor typically acquire influential stake in small-to-midsize company, take board seats and try to push changes that may increase shareholder value. I personally don't hold anything against them. They seem to go after management who get too comfortable in their role. Activism seems to be the primary way now hedge funds create Alpha. A Primer on Starboard, the Activist That Pushed for a Staples-Office Depot Merger http://dealbook.nytimes.com/2015/02/04/a-primer-on-starboard-the-activist-that-pushed-for-a-staples-office-depot-merger/ http://dealbook.nytimes.com/2015/02/04/a-primer-on-starboard... Starboard’s Olive Garden Slides: Salting the Water, Custom Straws and More http://blogs.wsj.com/moneybeat/2014/09/12/starboards-olive-garden-slides-salting-the-water-custom-straws-and-more/ http://blogs.wsj.com/moneybeat/2014/09/12/starboards-olive-g...
    • scottmcleod 11y ago
      Thanks for sharing
  • ubernostrum 11y ago
    "Activist" typically refers to investors who try to either obtain enough shares, or sway the votes of enough shares, to get seats on a company's board and enact a specific agenda they want. It's often used pejoratively to refer to investors who want to gain influence just long enough to reap a profit from gutting the company, leaving other investors with now-worthless shares in the husk they leave behind.
• frik 11y ago
  The most stupid decision was to stop their own search engine based on Hadoop (Yahoo run the largest Hadoop cluster ~ 2009). Nowadays Yahoo could run their own cloud hosting platform, etc.
  • toast0 11y ago
    Stupider than deciding to shut it down and outsource to Bing was outsourcing and not shutting it down. (outsourcing to Microsoft was a poor decision as well: Microsoft did about as well for Y! as Y! did itself with less flexibility; but outsourcing to google again was nixed by regulators)
    • mkagenius 11y ago
      Search still is a significant source of revenue and growth for them. 1. http://adage.com/article/digital/yahoo-s-display-search-revenues-growing/298173/ http://adage.com/article/digital/yahoo-s-display-search-reve...
• aikah 11y ago
  It's interesting that they are talking about the Board directly and not Marissa Mayer. Is it common for the press to do so ? Isn't the CEO like the spoke-person of the board of investors ? Why would the board side step the CEO that way in the media ?
  • smt88 11y ago
    > It's interesting that they are talking about the Board directly and not Marissa Mayer They're talking about something the Board, and not Marissa Mayer, is doing. Marissa Mayer is not deciding these things. There's no reason to bring her up. > Is it common for the press to do so ? It depends on the situation. If the Board is doing something, the media talks about the Board. If the CEO is doing something, the media talks about the CEO. The first confusing exception is when the CEO owns most of the company, which makes the Board irrelevant. This is the case with Facebook: Mark Zuckerberg owns the majority of voting shares, so he has absolute control over Facebook. The Board has no power to overrule his decisions as CEO. The second confusing exception is when the CEO and Chairman of the Board are the same person. This was much more common in the past. > Isn't the CEO like the spoke-person of the board of investors ? No, unless the CEO is also the Chairman of the Board. The CEO can have very conflicting opinions and actions compared to the Board.
    • jacquesm 11y ago
      > The CEO can have very conflicting opinions and actions compared to the Board. Which usually does not end well for the CEO.
      • deleted 11y ago
        [deleted]
• reeboo 11y ago
  Let's say the first domino falls and they decide to sell. Next Google buys them and converts all Yahoo! search traffic to Google search traffic. That leaves Mozilla in a really odd spot. Most of their revenue comes from Yahoo! so they would eventually have to either go back and make a deal with Google or move over to using Bing as their default. Search engine competition gives Mozilla an upper hand at the bargaining table, this could be not great for them.
  • ekianjo 11y ago
    Wouldn't such a merger be prevented by anti-trust laws or something?
    • reeboo 11y ago
      I don't know. I'm not a lawyer.
      • deleted 11y ago
        [deleted]
      • late2part 11y ago
        Neither do the lawyers, usually.
        • dmourati 11y ago
          http://www.unclaw.com/chin/teaching/antitrust/herfindahl.htm http://www.unclaw.com/chin/teaching/antitrust/herfindahl.htm disclaimer: recovering attorney who studied this in law school long ago. no longer practicing.
    • seanwilson 11y ago
      Google would likely avoid something like this I think seeing as they're already under anti-trust scrutiny.
  • talmand 11y ago
• pjzedalis 11y ago
  Steve Ballmer will buy Yahoo after all.
• voltagex_ 11y ago
  Goddamnit, time to migrate everything off Flickr. Anyone got good alternatives? I only need ~50GB of space.
  • striking 11y ago
    Mega.nz works, for free. YMMV.
  • rodgerd 11y ago
    You never know. Perhaps flickr will end up with someone who will run it better. Or Google will buy it, loot the customer data, and close it down.
    • voltagex_ 11y ago
      They were actually doing pretty well at New-Yahoo, except for when they removed Google login support and I ended up with 2x Yahoo accounts and can't move my Flickr amongst them.
  • jameslk 11y ago
    I've been really happy with 500px. Their interface is quite pain-free to use. They're more geared towards photographers looking to host their portfolio
    • pmlnr 11y ago
      I'm having issues with both the philosophy and more, the forced square cuts of 500px. Also: http://www.naturephotoguides.com/blog/photo-consumption-conformity http://www.naturephotoguides.com/blog/photo-consumption-conf...
      • jameslk 11y ago
        I agree with the popularity aspect being sort of a pissing contest. As for your concern regarding the forced squares--I assume you're talking about the layout of portfolio photos--they seem to have moved away from that a bit, with wide landscapes being more reasonably displayed. They actually updated a bunch of their UI as of late. It's not the ideal service but unfortunately I don't know of any other options that are much better overall as mentioned in the piece you linked.
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• andy_ppp 11y ago
  I've always thought of companies as mining a local maxima of their solution space. Whatever you say about Yahoo! They are extraordinarily successful at extracting the maximum revenue for display advertising. I'd let them sell display ads for me.
• ryporter 11y ago
  The idea makes a lot of sense, but why can't Yahoo! simply spin off their core business? They ran into troubles spinning out the Alibaba stake, but spinning themselves out would split their valuable Asian assets from their core business, which has an implied negative valuation. Would the IRS frown upon them leaving behind what is effectively a holding company?
• netman21 11y ago
  What I can't understand is why they already spun off Yahoo Small Business to the holding company for the Alibaba stock, Aabaco. https://www.aabacosmallbusiness.com/ https://www.aabacosmallbusiness.com/
• gcb0 11y ago
  here's the reason why every six months you read this same headline: previous yahoo investors invested with almost zero dividends. that means, yahoo kept all its profits. now yahoo is still profitable, it's just not growing as fast as the competition. those money reserves are still in the bank. new investors think they can just pony up a few dollars for YHOO shares, pay a magazine to say yahoo is worth nothing, and convince the board to force a sale. that would then expose those big money reserves to the current holders, giving them instant huge profits for nothing. and this is the reason you see that every six months.