Yahoo is getting a lot of pressure to sell its core business that includes email, news and online search engine, which is one of the largest in the tech world. The company’s board has been considering series of meetings that will discuss whether to stick to the original plan of spinning off stake at Alibaba’s or sell its core business, or even both.
However the question is, “Will there be a company willing to cash out huge amount of funds in order to buy the company’s core business?
According to analysts as stated in USA Today, possible buyers could be other equally and more capable companies such as phone giant AT&T, search engine companies Google and Microsoft, and even NewsCorp, Rupert Murdoch’s company which owns news publications like The Wall Street Journal.
Scott Kessler, equity analyst at S&P Capital IQ said that this core business of Yahoo is "more than just something that would be of interest to other Internet or tech companies.” In fact, he added that this could also appeal to international players such as media, telecom and cable companies in the world. Moreover, Alibaba and Softbank are also potential buyers since they can be able to buy back their shares once they gain power over the company.
Shareholders of the company have been unhappy for quite a while now due to the sagging growth which can be explained by the considerable decreasing earnings of $4 billion in 2015 fiscal year compared to $4.4 billion in the previous one. The company’s share have also declined 33% this year, which is alarming, according to BD Live. Moreover, sluggish digital advertising also has been part of the concern of the shareholders.
"Realising value is far from assured,” Brian Wieser, an analyst with Pivotal Research Group, wrote in a note, as cited by BD Live. "The company’s core business is in seemingly permanent decline."
The sale of its core business can rack up to $8 billion as estimated by SunTrust Robinson Humphreys Internet equity analyst Robert Peck.
"There's always a buyer out there," said BGC Partners technology analyst Colin Gillis. "In its current conglomerate state, it's very difficult to do anything with Yahoo."
However, investor and portfolio manager of Appleseed Fund, which owns 125,000 Yahoo shares, John Strauss said that Yahoo shareholders like the Appleseed Fund will be better off if the company that will buy Yahoo has the similar or complementary business to Yahoo’s, such as Microsoft or Google.
What do you think is the most fitting company that should buy Yahoo?
