
Yahoo to Reconsider Sale of Web Business Instead of Spinoff - w1ntermute
http://www.bloomberg.com/news/articles/2016-01-08/yahoo-said-to-reconsider-sale-of-web-business-instead-of-spinoff
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pbreit
I don't get how proxy investors who hold such a tiny percent of a company have
so much sway. Can't they just tell them to get lost?

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reubensutton
Not really, a proxy fight is when activist investors persuade a majority of
the votes to support their vision for the business.

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smegel
I feel like Yahoo would be best broken up into lots of tiny pieces which would
have the opportunity to become little independent start-ups in their own
right, taking whatever "bit" they have and turning into a new concept and
building a business around it. They need that injection of innovation and
modern startup mentality which probably won't happen in a monolithic behemoth
where everything is lumped together.

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prostoalex
As all of them would now have to pay for legal, accounting, recruiting, HR,
customer support and other services that used to be shared as well as
negotiate their own real estate leases, server purchases and data center
leases, how many of these tiny pieces would generate enough cash flow to
sustain themselves a few years down the road?

If the business is ad-supported, a bigger player can negotiate better rates
for their combined inventory, a smaller player is relegated to AdSense and
similar.

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smegel
> As all of them would now have to pay for legal, accounting, recruiting, HR,
> customer support and other services

True, but I guess this is true for all startups. And the reality is, for a
bunch of guys and gals working out of a garage you don't need a lot of that
stuff until you are actually successful.

> how many of these tiny pieces would generate enough cash flow to sustain
> themselves a few years down the road

Not many, and I guess that is the point. You are giving the worthy parts of
Yahoo the freedom to succeed, while letting the dead wood go to dust. It seems
the alternative is watching the whole thing die a slow death and there will be
nothing left at all (apart from the not-really-Yahoo Alibaba and Yahoo Japan).

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yalogin
What is Yahoo's main business? What assets come under the web business?

It feels like there is nothing much left outside of the web business unless I
am missing something. May be the Baba shares?

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deadalus
It is the fifth most visited site on the planet.

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mintplant
I think yalogin was asking what would be left if Yahoo sold off its "web
business", besides its Alibaba holdings.

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charlesdm
A big pile of cash to return to shareholders.

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localcrisis
The numbers here always amaze me. Would they be better off keeping Yahoo going
than, say, investing $20bn into the next generation of startups?

Just imagine a $20bn seed fund and the type of companies that could be funded.
Startups in more difficult industries that need a larger upfront investment
(genetics, pharmaceuticals, aerospace, etc.)

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ddorian43
Judging by the startups that yahoo actually bought I don't think it will pan
out.

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xenihn
So I have a question...

I have an extremely paltry amount of Yahoo stock (5 shares) that I bought on a
whim in 2014. This is the only investing I've done outside of my company 401k.
I know absolutely nothing about investing. What the heck should I do with it
at this point?

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jedberg
5 shares? Probably nothing, just let it ride. You'd probably drop $150 on a
dinner or two.

If you had 5000 shares I'd probably say the same thing -- this was already
priced into the stock and almost all of the value in the stock is the Alibaba
holding.

If the stock is up from when you bought it, maybe I'd say take some profit off
the table, but honestly a sale of Yahoo's web business would probably increase
the value, but who knows.

I personally don't invest in tech stocks because they're too volatile. :)

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SatoshiRoberts
They should invest all their money in real estate around Silicon Valley

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pbreit
The so called "smart money" wants them to sell their real estate.

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harryh
The "smart money" wants them to sell their real estate and return the cash to
shareholders who can then, if they so choose, invest in real estate directly
rather than through a convoluted corporate holding company that was never
designed to be a real estate company.

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Grishnakh
A company should do what it can to make a return for its shareholders. If it
finds that its original mission is failing, what's wrong with switching to
something else that they've found, maybe by accident, is highly profitable?

If the shareholders don't like it, they can sell their shares and try
investing in another crappy internet portal that burns money. Shareholders
have no right to complain about their companies' actions AFAIC; if you don't
like the way the company is run, sell your shares. You're not the owner of the
company when you own 1-millionth or whatever of it. The only people who have a
right to push for a change in the corporate direction are the members of the
board of directors. Everyone else is nothing more than in investor, basically
just a gambler.

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pbreit
"Shareholders have no right to complain about their companies' actions"

Uh...it's the complete opposite. First, anyone has the right to complain about
anything. But shareholders (i.e., owners) are practically obligated to weigh
in on the actions of things they own.

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Grishnakh
>First, anyone has the right to complain about anything.

Maybe, but the rest of us have the right to make fun of those people for
tilting at windmills.

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cpeterso
Are there any advantages for Yahoo _!_ of a spinoff over a sale of the web
business units? I assume Yahoo _!_ would retain some ownership shares in a
spinoff company, which could be valuable if they Yahoo _!_ was bullish on the
new company. In that case, though, why would they spin off those units?

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phamilton
Understanding the background here is important.

A year ago, Yahoo announced that they would spin off their stake in Alibaba
(around 30B). Somewhere along the last year, it was determined that the
spinoff might incur a huge tax bill, costing shareholders a few billion
dollars. Last month, they decided to do a reverse spin-off. Instead of
spinning off Alibaba, spin off everything else (which is only worth a few
billion). The tax bill on 4B is much less than the tax bill on 30B.

In other words, all that would be left after the spinoff is an Alibaba holding
company.

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mintplant
What would a holding company with a narrow focus like that do? Sit on the
shares? Make other investments? Liquidate assets and return money to
shareholders?

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phamilton
One theory is that Alibaba would buy that holding company. That would be an
effective stock buyback since shares in a holding company are usually
discounted (they are strictly inferior to actual shares since they lack things
like voting rights). So Alibaba can decrease total share count by X share and
only pay X _share_price_ 95%.

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w1ntermute
Related HN thread on planned Yahoo layoffs from yesterday:
[https://news.ycombinator.com/item?id=10861925](https://news.ycombinator.com/item?id=10861925)

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bobajeff
I wonder if Flickr and Tumblr would be better off under a spun off entity.

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toomuchtodo
I'd buy Flickr. I would not buy Tumblr. Tumblr is worthless.

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jonursenbach
Why?

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toomuchtodo
People will pay for Flickr Pro accounts (Flickr was profitable due to this).
People aren't going to pay for Tumblr.

EDIT: I've previously said on HN that I'd like to buy Flickr and roll it into
a benefit corp/non-profit sort of deal. I firmly believe that Pro users can
pay enough that Flickr can self-sustain itself.

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yeukhon
I said this in my other comment [1] too that they should spin off both.

Integrate with Tumblr has a good upshot - browsing Flickr picture is kind of
dull. If you have a Medium-like site for photo publish, you can create a web
photo magainze!

The one - on Tumblr is all the custom themes. IDKY, but Medium just looks
better for readers. Yahoo needs to make Tumblr for high quality posts, but
Tumblt started out with teens, mostly asks, gifts and quotes. Now really just
about reblogging every day and like I said I keep seeing the same stuff
reblogged every day.

[1]:
[https://news.ycombinator.com/item?id=10862680](https://news.ycombinator.com/item?id=10862680)

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ksec
For the same reason I think why a lot of the company will go private in the
next few years.

