Yahoo executives have sought to play down their company’s reputation as a constant shopper. The video game streaming service Twitch, the online video hub Hulu and the online content producer Maker Studios all made some strategic sense. The list of acquisitions that Yahoo should have made is perhaps even longer. When asked, Silicon Valley executives toss out a litany of other possibilities: BuzzFeed the freewheeling discussion forum Reddit and the online audio distributor SoundCloud. The company’s remaining Alibaba stake is its biggest asset. They need to make some bet on the future of monetization.” “But buying something like Pinterest could give them at shot at the next turn of the wheel.
“The type of advertising that Yahoo relies on is fundamentally challenged,” said Jon Miller, a former chief executive of AOL who now invests in technology and media companies. The business review site Yelp and the hugely popular social network The most obvious use would be acquisitions, and bankers have been preparing countless pitches for potential targets, including To investors, probably in the form of a stock buyback.īeyond that, executives have been quiet about what they have in store for their cash pile. Management has been quick and consistent in proclaiming that at least half of the proceeds will be paid out The easiest way to do that would be through more acquisitions, using the money from the Alibaba share sale. One deal maker, a Silicon Valley adviser who was not authorized to speak publicly, put it more succinctly: “The company has to be fundamentally rewired.” Risk-reward elsewhere.” He downgraded the shares to sector perform. Mark Mahaney, a research analyst at RBC Capital Markets, wrote in a research note on Thursday that with the Alibaba initial public offering over, “we see upside as limited from here and now see more compelling Its email offering retains nearly 300 million users but has ceded its crown to Google’s Gmail. The company has steadily lost ground in mainstay businesses like selling display and search advertisements as competitors like Facebook, Twitter and automated ad buying systems have risen. Subtract the expected taxes that selling the Asian companies would generate, and what remains is worth perhaps $13 billion.Īnd what remains, analysts say, is challenged.
Yahoo’s market value was about $39 billion as of the close of the market on Thursday. The second-most valuable one is the company’s 35 percent stake in its Japanese affiliate, Yahoo Japan, which Still, the remaining Alibaba stake is by far the single most valuable asset that Ms.
Once the public was able to buy Alibaba shares directly, however, the need for Yahoo as a proxy disappeared. Before Alibaba went public, the only way most shareholders could obtain any sort of financial exposure to Alibaba was to invest The question of Yahoo’s fate will become only more acute over the next year or so. Sarah Meron, a spokeswoman for Yahoo, declined to comment on the company’s acquisition strategy or its long-term plans for its remaining Alibaba stock, which it has promised to hold for at least a year. Now restive shareholders are clamoring to receive the bulk of the cash from the Alibaba stake sale, potentially limiting Ms. Yahoo could use the proceeds from the Alibaba share sale to go on an acquisition spree to help reinvent itself and regain relevance.īut many investors and analysts have been underwhelmed by previous takeover efforts, including the $1.1 billion purchase of the blog network Tumblr, Yet Yahoo’s shares have tumbled more than 8 percent since then, highlighting the peculiarly difficultĬrossroad that now confronts Yahoo and its chief executive, Marissa Mayer. The company sold Alibaba shares worth $6 billion after taxes, and its remaining stake is valued at $36 billion. Public market debut last week of Alibaba, the Chinese e-commerce giant. Yahoo, more than any other investor, should have benefited from
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