
Yahoo Said to Start Approaching Possible Bidders Soon As Monday - bmnews
http://www.bloomberg.com/news/articles/2016-02-21/yahoo-said-to-start-approaching-possible-bidders-soon-as-monday
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pfarnsworth
The investors are hoping for a second-coming of Steve Jobs but they are
delusional. But they also have a profitable business. Instead of cutting all
these verticals, I think they should build on them, as long as they are
accretive to earnings. Yahoo has significant name brand recognition,
especially amongst the 40-something and older.

Why not just build an entire lifestyle company around this? Yahoo Internet TV,
Yahoo Banking, Yahoo Insurance, Yahoo Real Estate, etc. It might not make Wall
Street happy because they're not growing 20% YoY but they would become a one-
stop shop for everything a person would need on the Internet, and they can
capture a lot of stickiness that way. They tried that to a certain degree but
never to the amount of commitment that would make it stick. I think they
should double-down and get things like banking and insurance in there, as
well, so that people who need to pay bills, etc, will all use the same site.

And keep throwing shit on the wall and see what sticks, maybe they do come up
with something that revitalizes them like an iPhone.

But their brand is the most valuable thing about them now, why not just expand
horizontally into slower-growth but ultimately profitable businesses?

~~~
interesting_att
This is what I wondered too. Yahoo could be a great business if they just
accepted that they were the Internet Portal for Old People.

But this would never impress investors who are looking for insane returns. As
a result, they're taking everyone down with them.

~~~
smacktoward
The problem with being the Internet Portal for Old People is that old people
have a bad habit of dying. So unless you're also the Internet Portal for
Middle-Aged People and the Internet Portal for Young People, when the current
crop of old people bites the dust, they get replaced by a new cohort who bring
along whatever habits they developed while you were ignoring them.

~~~
DamnYuppie
By old I think they are mostly referencing those who are 40 and 50 years old
who were young when Yahoo was first introduced.

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dhruvrrp
Yahoo was somewhat bound to this state when it decided to brand as a
advertising company instead of a tech giant.

They had yahoo answers before Quora got popular, they had tumblr, yahoo
sports, etc., all of which were market leaders at some point in time but in
the end all the potential got wasted due to the direction the company took.

~~~
danjayh
Marissa Mayer's been at the top for 2012, and really is responsible for the
direction that Yahoo has taken in the past four years. I have to wonder --
will Yahoo's sale (and inevitable downsizing) play out worse for her, or the
people who were merely following her direction?

~~~
vonklaus
It would have been really really hard to save Yahoo, but it could have been
done. Obviously it will play poorly for everyone short term as many will lose
their jobs.

However, just like the fail fast & learn, I dont think she will, nor should,
pay a permanent price for this as she is actually a much smarter executive
from that experience.

The problem with yahoo has always been well understood, no one knows what the
fuck it is. It provides some value to a lot of different groups of people. It
came out of Mayer's tenure looking the same way, a big company with a lot of
pretty good things centralized in a disjointed way which was a missed
opportunity.

Yahoo finance should have been broken into a stand alone site and become an
investing portal selling side services to people and market data to others.

Yahoo should have restructured as a news organization and retooled the UI to
look like bloomberg.

Fantasy sports should have been split out into a business and either sold to,
or transformed into draft kings, etc.

Search engine actually quite valuable if it isnt someone elses results
rebranded.

~~~
rokhayakebe
_nor should, pay a permanent price_

Correct. This is just a job. If she gave it her best and more and they fail,
then that is just outside her hands.

Edit. _no one knows what the fuck it is_

Correct again. Apple:iPhone/Mobile. Google:Search.
Microsoft:Windows/Software/PC. Facebook: Connection/Address Book.
Wikipedia:Encyclopedia. Yahoo and Twitter, while very useful to millions,
suffer the same problem.

~~~
RHSeeger
I don't agree with this sentiment. Rather, I'd say that she tried and failed,
and that that failure was as much her fault as it was anyone else's. Saying it
was "outside her hands" implies she did the best that was possible, not just
the best that was possible for her.

1\. She was worth less than they thought when they brought her in. They paid
for someone they thought could solve their problems, and she could not.

2\. She's worth more now than she was when they hired her, because she does
have more experience (this point I agree on).

This means, to me that she's worth somewhere between "what she was really
worth when they hired her" and "that amount plus the value she gained by
learning".

Given the decisions I saw her make (no remote work, basically firing anyone
that wanted to continue their remote work), I'd say she was worth a lot less
than they thought she was when she started... and worth a lot less now, even
with new experiences.

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robryan
I wonder if it makes any sense for Alibaba to buy Yahoo. Primarily buying back
the shares but could also refocus yahoo more around ecommerce.

~~~
danjayh
Even though Alibaba is Chinese owned, and based in a country whose attitude
toward free speech is not something I'd like to spread, somehow I'm more
comfortable with them as a suitor for Yahoo than I am with Comcast or Verizon
(shudder).

~~~
vonklaus
I don't have time to find the source right now but there was speculation that
a structure could be found that achieves this. While I may not capture the
exact method, it was essentially something like:

* Yahoo would sell the core "Yahoo" piece or businesses components leaving the new Yahoo as just a shell company with just BABA holdings. Essentially, they decouple it entirely.

* Yahoo's components would be sold and then BABA would almost certainly purchase all of the Yahoo stock, which would just be, in reality, a stock buy back from their standpoint.

* The actual Yahoo components would go to whoever bought them, but likely not to BABA.

Not sure how this plays, but it doesn't seem like anyone smart realizes Yahoo
core is valuable, or at least has not been publicly announced as a suitor. It
does not seem feasible to recap the company in reverse, selling BABA and
betting on itself, although I think that is the move personally.

The result currently appears that BABA does a stock rebuy and Yahoo disappears
entirely. The employees acquihired slowly look for better jobs over the next
year as they work with the acquirer to destroy yahoo by integrateding it into
whatever piece of shit idea some executive has.

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assocguilt
Greed - there's no reason why Yahoo! cannot operate as a smaller but
profitable business - it's never going to be the industry leader it once was
but the fact it's still around after all these years is impressive in its own
right - a new CEO needs to come onboard and give the company the respect it
deserves by cutting a lot of staff, products and services and focus on a
smaller set of services that drive a smaller profit.

~~~
nugget
Yahoo today is a private equity fund first and an operating business second.
By that I mean, the vast majority of Yahoo's value derives from investments
like Alibaba and Yahoo Japan. The core business is relatively small. You might
have to do a deal like this in order to get the core business spun out cleanly
from the rest.

Regarding the core business, we're in an era where markets are becoming more
winner-take-all meaning scale is your network effect and there are huge gaps
between 2nd or 3rd place and the rest. This is especially true in ad tech and
ad supported businesses (Facebook, Google, and the rest). From this
perspective, Yahoo core is probably hugely more valuable to Verizon or another
massive company who can credibly challenge Facebook and Google, than it would
be by itself.

~~~
gtrubetskoy
In fact if you add all the numbers for the Alibaba and Yahoo Japan, it ads up
to less than what it should be, i.e. on its own the core business has a
_negative_ value, which is kind of interesting.

~~~
rokhayakebe
Excluding Alibaba and Yahoo Japan, is Yahoo unprofitable?

~~~
henrikschroder
No, Core Yahoo is a profitable multi-billion-dollar company in a slowly
declining market.

The reason the market values Core Yahoo negative, is because it thinks the
current management will destroy capital by spending it on useless acquisitions
and costly R&D to become a growth company again.

But accepting that it is a stable company that's going to bring in billions in
revenue for years, and just milking it dry is actually not a bad strategy.
It's a very _boring_ strategy though.

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voltagex_
Somebody save Flickr...

~~~
fma
Flickr is the only reason I have an active Yahoo account.

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tn13
I kind of feel sad for this company. They had very strong model. Build
something that scales to millions of users and offer it for free along with
ads. As long as the cost of scaling is less than ad revenue you run a profit.

Clearly marketing and engineering both were strengths here but I strongly feel
they lost the control of engineering side. They probably did not invest in
tech leadership that was required. This is a sinking ship and can not be
turned around.

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Pyxl101
> Companies such as Verizon Communications Inc., Comcast Corp. and AT&T Inc.
> are among interested parties, as well as buyout firms including Bain Capital
> Partners, KKR & Co. and TPG, the people said, asking not to be identified as
> the situation isn’t public.

So if it's not public, why are they making it public by talking to the press?
What do people get in exchange for leaking information like this? I've always
wondered.

~~~
praneshp
Sometimes, help later. For example, an ex-Yahoo leaked information to Business
Insider in exchange for positive coverage of the startup she was moving to.
[1]

[1]: [http://www.mercurynews.com/business/ci_28661223/ex-yahoo-
emp...](http://www.mercurynews.com/business/ci_28661223/ex-yahoo-employee-
admits-leaking-information-author-marissa)

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smegel
Would a buyer be buying anything more than a user base (not to say that is not
a worthy thing to buy)?

~~~
phamilton
4B in annual revenue.

~~~
jhatax
In an ideal world, Berkshire Hathaway would have been a suitor, but Warren
Buffett doesn't care about Internet companies. Think about the companies Mr.
Buffett has owned privately - See's Candies, Brook's, DQ - they make a known
amount of money every year and aren't under pressure to make more as long as
they preserve their maket position and revenue numbers.

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piyush_soni
So forgive my asking, but what exactly is Yahoo's "core business"? They always
appear to me as doing 20 different things, but none perfectly.

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ChuckFrank
Can Yahoo get its money back from its current CEO? Or did they really pay
someone to run this ship aground?

At the time when they were looking, I wrote Jerry an open letter about what I
thought could be done. Sure I'm a nobody, but none of the ideas were even,
through the chances of good business, implemented. Instead there was a fancy
rebranding, and a targeting of women's lifestyle channels. And now this.

I'm glad we have a competitive economy, or else I could imagine Yahoo becoming
the service that sucked, but that everyone still used.

~~~
SteveGerencser
The ship has been grounded for a lot longer than the last 3 CEOs have been
around. they should have scuttled it and sold it off for parts a very long
time ago.

~~~
ChuckFrank
true.

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lcc
Submitted by bmnews - does this mean news outlets are starting to submit their
own articles to HN directly?

~~~
saryant
"starting to"?

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SatoshiRoberts
Who will buy Yahoo! Sports?

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rokhayakebe
Facebook makes sense.

