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Yahoo most likely has contingencies in place that would make a pullout from the deal very painful for VZ. Otherwise VZ would have much more leverage, since the
by sna1l 10y ago
Yahoo most likely has contingencies in place that would make a pullout from the deal very painful for VZ.
Otherwise VZ would have much more leverage, since they don't need Yahoo like Yahoo needs them.
- grigjd3 10y agoLaws are being relaxed on subsidizing data plans with ads so Verizon wants ad-tech. Is it really that hard to understand?
- jpadkins 10y agoyahoo has adtech?
- notyourwork 10y agoI was as surprised as you are, https://advertising.yahoo.com/ https://advertising.yahoo.com/
- utopcell 10y agoYahoo needs Verizon ? Yahoo just posted $300M Q4 net profits.
- pcurve 10y agoThey made $66.2M in Q4 from their actual business activity. 3 quarters prior to that have been losses. Operating Income -110.5M -107.1M -39.4M 66.2M Q4 earnings was $160mil, most of it came from Equity in earning.
- utopcell 10y agoWhat is the argument here ? $66.2M 'actual' net profit is still net profit. Indeed there were losses in previous quarters, but it seems that they managed to turn it around. Yahoo is by no means a healthy, growing company at this point but I fail to see how they "need" Verizon.
- nikdaheratik 10y agoThe argument makes sense if you understand the context behind the Y! deal. 1. A large number of their shareholders want to be able to separate the web business from their outside investments in Y! Japan and Alibaba, but they aren't allowed to without taking a huge tax hit. 2. The only way left to facilitate this deal is to sell off the web business and then do other stuff with the remaining equity that basically turns the Y! shares into Alibaba and Y! Japan shares. 3. But no one wants to buy the web business since it's not very profitable (for a tech company it's very low price/earnings and profit margin) and looking worse thanks the the security issues. 4. That's why Y! needs Verizon much more than the other way around.
- utopcell 10y agoPoint 1 is clear and on the company's todo list for a long time, but 2 and 3 are not: Yahoo could create a new entity into which the web business is transferred.
- pyvpx 10y agothey tried that, and all the tax experts they could hire said they'd still get a huge IRS bill.
- utopcell 10y agoNot true: they tried to create an entity and move the Yahoo! Japan and Alibaba holdings in there, which had the perceived danger of a huge tax bill. They could create an entity to move the main business in, which would be taxed as much as the current deal.
- nikdaheratik 10y agoI think it's safe to assume that they investigated every other angle as far as reducing the tax burden goes and this is the best they came up with (source: fiduciary responsibility if nothing else). Unless you have some inside info or reporting that says otherwise.