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Thursday 4 February 2016

Yahoo! still on a downward trajectory

Marissa Mayer was brought into Yahoo! to turn the fast failing internet business around; the monumental task requires Yahoo! to take on rivals Twitter, Google and Facebook to restore both market share and profitability.


Marissa, a former Google vice president defected to former rival Yahoo! after the business plunged to serious depths of despair; unfortunately, the business hasn't performed since Mayer's 2012 appointment.

Yahoo! has three main divisions of search, mail and Tumblr and may soon be realigned into four divisions of news, sport, lifestyle and finance. Under Mayer, the business has engaged in high profile acquisitions that have failed to increase shareholder value.

The board is considering the sale of patents, real estate and a number of programs as earning decrease again. Jobs are at risk with 1600 or more employees shown the door with more probable job losses pending.

The board is seeking strategic partnerships but one expects Amazon, Google, eBay, Facebook or Apple to launch a takeover and break the company up and sell the divisions individually in a move that might increase shareholder value.

Software company Microsoft's acquisition of Nokia's handset division might indicate a change of strategic direction of the software only business. A move into the internet business after spinning off unwanted divisions with Tumblr possibly providing a great ready-made solution into social media to diversify the business.

Yahoo!'s $32 billion stake in Alibaba was to be spun off but that looks unlikely now; the $8.6 billion Yahoo! Japan stake may be divested but may significant taxation issues and may prove to be a negative equity business.

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