Yahoo has finally opened its doors to a possible sale of its core internet business after facing another turbulent year of declining business and eroding market value. This comes at a time CEO Marissa Mayer is still hoping for a turnaround of the early internet star.
Yahoo on Tuesday (2 February) announced its results for the fourth quarter of 2015. It reported revenues of $1.3bn (?900m; ?1.2bn) and a loss of $4.4bn on account of a goodwill impairment.
The troubled internet portal has been under extreme pressure from investors to sell its core assets, and perhaps the entire company. According to the Financial Times, telecom companies like Verizon and AT&T, and digital media groups such as IAC are potential suitors.
In a statement, Yahoo chairman Maynard Webb said: "Separating our Alibaba stake from our operating business continues to be a primary focus and our most direct path to value maximization. In addition to continuing work on the reverse spin, which we've discussed previously, we will engage on qualified strategic proposals."
Mayer still announced a transformation plan to return to "modest and accelerating" growth in 2017 and 2018. The plan would explore ways to reduce costs by $400m and raise around $1bn to $3bn from sale of non-strategic assets, patents and real estate.
"By the end of 2016, the company anticipates having approximately 9,000 employees and fewer than 1,000 contractors. This represents a workforce that is roughly 42% smaller than it was in 2012," Mayer said. The job cuts were estimated at 1,700, or about 15% of its total workforce.
Under Mayer's plan, Yahoo would consolidate its businesses and global presence. It would shut operations in Dubai, Mexico City, Buenos Aires, Madrid and Milan, and increase focus in growth markets like the US, Canada, UK, Germany, Hong Kong, and Taiwan.
It would also close down services including Games and Smart TV, and Yahoo Screen, and simplify its product portfolio to three platforms ? Search, Mail, and Tumblr ? besides focussing on specific verticals of news, sports, finance and lifestyle.
Mayer said: "We concluded that the carrying value of our US & Canada, Europe, Latin America and Tumblr reporting units exceeded their respective estimated fair values." The US remained Yahoo's biggest market, accounting for 80% of the company's revenue, followed by the Asia Pacific region which contributed about 13%.
Once a leading internet company that brought the dot.com boom, Yahoo's revenue has declined from $7bn in 2008 to less than $5bn as it lost market share to Google and Microsoft. The company holds a 40% stake worth $25bn in Alibaba, a China-based e-commerce company.
Topic: Yahoo opened its doors to a possible sale after reporting $4.4bn loss (Read 1178 times)
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October 05, 2016, 10:07:32 AM