Yahoo Board Debates Future of Company

SAN FRANCISCO/BENGALURU (Reuters) -
The Yahoo logo is shown at the company's headquarters in Sunnyvale, California in this April 16, 2013 file photo. Online search and advertising company Yahoo Inc's board plans to weigh the potential sale of its Internet business when it meets Wednesday through Friday, The Wall Street Journal reported on Tuesday. REUTERS/Robert Galbraith/Files
The Yahoo logo is shown at the company’s headquarters in Sunnyvale, California in this file photo. (Reuters/Robert Galbraith/Files)

When it meets this week, the board of Yahoo Inc. will discuss the prospect of selling its core Internet business, an inside source told Reuters.

The board’s meeting comes amid a broader debate about the future of the company and that of high-profile Chief Executive Marissa Mayer.

The Wall Street Journal first reported the possible sale of the Internet business late on Tuesday. People familiar with the matter told the newspaper the board was also expected to discuss whether to proceed with a plan to spin off more than $30 billion in shares of Alibaba Holding Group Ltd. The company could also pursue both options, the paper said.

The company’s shares were up more than 7 percent in extended trading.

In the past, analysts have said that Yahoo’s core business would interest a range of potential buyers including private equity firms, media and telecom companies, and firms like Softbank Group Corp.

The news comes as Mayer faces growing pressure over the company’s poor performance. Mayer came to Yahoo after a long stint at Google. During Mayer’s 13-year tenure at Google, she led the Google Earth, Gmail and Google News teams and is credited with helping create the company’s celebrated search page. Her arrival at Yahoo kicked off heightened expectations of a quick turnaround, which was struggling to grow its advertising business to compete with market leaders.

Hopes of a comeback crumbled as Yahoo’s plan to push ads – a strategy Mayer introduced in 2014 under the acronym Mavens – failed to increase revenues as desktop search ads continued to decline.

A $1.1 billion deal in 2013 to acquire a social media site also hit snags, with investors arguing that Mayer overpaid for an unprofitable product. The deal lifted Yahoo’s user base to about 1 billion but did not bring in advertisers.

In September, Yahoo’s plans to spin off its stake in Alibaba hit a roadblock when the U.S. Internal Revenue Service denied a request to consider the transaction a tax-free deal. Yahoo said it planned to proceed with the spinoff despite the IRS announcement, but has not yet done so.

In November, activist investor Starboard Value LP asked Yahoo to drop the Alibaba plans and urged the company to sell its core search and display advertising businesses instead.

Yahoo declined to comment on the report.