|
 The announcement is the strongest sign yet that the board and Chief
Executive Marissa Mayer may be willing to sell the struggling
Internet business - essentially websites, email and online search -
under growing pressure from impatient shareholders.
In an interview with Reuters, Mayer said the company will entertain
offers as they come but its first priority is the turnaround plan.
If it receives an offer this year, it was unlikely that the
transaction would be completed before the 9 to 12-month timeline
projected for the spin-off, she said.
"We would obviously engage but I think the one thing we're trying to
do is set our shareholders' expectations in terms of complexity,"
Mayer said.
The planned restructuring announced on Tuesday includes the closure
of offices in five locations, a paring down of its products,
shifting more resources to mobile search, and the sale of some
non-strategic assets such as real estate and patents.
Investors were not immediately impressed, sending Yahoo shares down
1.2 percent after hours. They have now fallen 36 percent over the
past 12 months.
"We believe the strategic plan does not fully address the core
issues which have destroyed shareholder value - poor capital
allocation, bad strategic partnerships, out of control spending and
a bloated workforce," said New York-based SpringOwl Asset
Management, a shareholder which has called for changes at the
company.
The web pioneer's revenue peaked in 2008 and while it still runs
some of the world's most-read websites, it has been unable to keep
up with Alphabet Inc's Google and Facebook Inc in the battle for
online advertisers.
In the rejig of its business, it will focus on three main consumer
platforms, Search, Mail and Tumblr, and four "digital content
strongholds" in the form of News, Sports, Finance and Lifestyle.
The changes are designed to increase mobile, video, native and
social advertising revenue 8 percent to $1.8 billion and cut
operating costs by $400 million this year. It is also aiming to
generate $1 billion to $3 billion in asset sales.
Mayer dismissed accusations of excessive spending, saying a report
of a $7 million bill for Yahoo's holiday party was exaggerated by a
factor of three.
[to top of second column] |
Yahoo's adjusted quarterly revenue tumbled 15 percent to $1 billion
after deducting fees paid to partner websites, as it struggles to
keep its share of online search and display advertising.
Mayer proposed in December that Yahoo spin off its main business
after it abandoned efforts to sell its Alibaba stake.
In the interview on Tuesday, Mayer said the company intends to group
its stake in Yahoo Japan with the main business, but would be open
to splitting it off depending on market feedback.
The company reported a loss of $4.43 billion, or $4.70 per share, in
the quarter, due to a large write-down to account for the lower
value of some units. That compared with net income of $166.3
million, or 17 cents per share, a year earlier.
Among the write-downs, the company took an impairment charge of $230
million for Tumblr, the social blogging site for which it paid $1.1
billion in 2013.
Excluding items, Yahoo earned 13 cents per share in line with
expectations.
(Reporting by Abhirup Roy and Anya George Tharakan in Bengaluru and
Deborah M. Todd in San Francisco; Editing by Stephen R. Trousdale
and Edwina Gibbs)
[© 2016 Thomson Reuters. All rights
reserved.] Copyright 2016 Reuters. All rights reserved. This material may not be published,
broadcast, rewritten or redistributed.
 |
