Less than a decade ago, Microsoft was ready to buy a majority stake in yahoo for 44.6 billion dollars. Right now, Yahoo's core business is valued to be less than zero. We're talking about Yahoo's core business here and not about its investment in Alibaba (which is currently valued at more than 25 million dollars) or Yahoo Japan (another independent company).
4 years ago, Yahoo made one of Google's best known executives - Marissa Mayer as the Chief Executive to turn around Yahoo's fortunes. She said that “To succeed, Yahoo will have to be a predominantly mobile company” which the company was arguably not, at that at that period of time.
Now in 2016, Mayer acknowledges that their efforts went all but in vein when discussing the company's fourth quarter earnings of 2015. The internet giant that is older than Google would cut about 15 percent of its workforce and consider "strategic alternatives" for its core Internet business - a phrase that seems to suggest that the board is willing to sell part of, or all of Yahoo's struggling business. The price tag of Yahoo will depend on what's being sold - the core business of Yahoo or its stakes in both Alibaba and Yahoo Japan or a combination of these.
If Yahoo entertains offers and considers selling, who should buy it?
Certainly not Google.
Google - a long term competitor can not think about buying Yahoo as it would just make the Antitrust Regulator in the US wipe off any such attempt.
If Microsoft makes an effort to buy Yahoo as it did in 2008, it would not look like a smart deal but stranger things have happened. Why would Microsoft headed by Satya Nadella want to buy Yahoo while they already have what they want from Yahoo with the 10 year deal that was signed in 2010 and amended in 2015. Microsoft buying Yahoo is less likely to happen.
Yahoo bought a 40 percent stake in Alibaba for 1 billion in 2005 and reaped a huge return of over $7 billion in 2012 from Alibaba for half of Yahoo's holdings in the Chinese ECommerce Giant. Another $550 million was paid to Yahoo by Alibaba under a revised technology and patent licensing agreement.
Jack Ma, the executive Chairman of Alibaba has hinted in the past that he has global aspirations. Alibaba may jump in with the view to buy back the remaining 15% Yahoo's stake in Alibaba.
With Nikesh Arora as President, Softbank is expanding its internet and media businesses. Softbank, which happens to be one of the three major wireless service providers in Japan, has a majority stake in Yahoo Japan, an independent company in which Yahoo also has 35% stake. Buying Yahoo, as pointed out by some analysts, can provide Softbank with a broader digital platform outside Japan.
AT&T, the telecom leader, acquired DirecTV for close to 49 billion dollars last year and started to bundle the TV service with its other services, such as high-speed Internet and phone. With a view to to grow its wireless video offering, it may be considering the option of buying Yahoo.
Verizon's CEO Lowell McAdam has said in the recent past that they would look at Yahoo if it goes for sale. Marrying up some of Yahoo's assets with Verizon’s recently acquired AOL business would be a good thing for investors. Acquiring AOL made Verizon enter the internet publishing business but buying Yahoo would give them the bragging right of being the biggest internet publisher by a wide margin. In addition, they can use Yahoo's technology to grow their mobile video service. With Verizon expressing interest, this acquisition is likely to happen.
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