Yahoo! Inc. (NASDAQ:YHOO) Future Depends On Alibaba Share Spinoff


Yahoo! Inc. (NASDAQ:YHOO) has seen a boost in the market on talks of stake sale in Alibaba Group Holding Ltd. The decision is being mulled in the meeting of the Board of Members and it still remains to be seen whether the company will go for spinning their stake in the Chinese company. Another decision that is being taken into consideration is the need of a buyer to purchase the Web businesses of the company, as per a company insider.

CEO Stance On Spinoff

The share spinoff had been earlier decided to be carried out in January by Yahoo Chief Executive Officer Marissa Mayer. The investors are still awaiting an update on the decision. The CEO faces a major challenge as an investor has threatened to go for a proxy fight if she did not update soon.

The company was planning the spinoff worth $30 billion to be completed this year and this had been announced by Mayer while releasing the 3Q15 results in October 2015. Mayer had also said that she was having some great expectations from the core business of the company and was confident that they had the right manpower, plan, tools and other requirements that could help take the company towards growth. Brian Wieser from Pivotal Research Group said that the core business of the company was declining.

Analyst Take

According to CRT Capital Group analyst Robert Coolbrith, whatever the decision, it would yield positive results for the company. In over three years of her career as the Yahoo! Inc. (NASDAQ:YHOO) CEO, Mayer has not had a major luck in growing the company revenues and analysts have estimated the company’s revenue to see a dip of 8% in the current fiscal. The revenues are going to see a growth only after Alibaba matter was resolved.

Even as Mayer has been working on additional features to the smartphones and also unleashing new products in the marketing field to attract the marketers, the company is not doing too well.  Mayer has also lost some important executives who were part of the Alibaba share sale deal including chief development officer Jacqueline Reses, media strategist Rob Barrett and chief marketing officer Kathy Savitt, this year.