Yahoo board ‘weighing sale of core business and Marissa Mayer’s future’


The Yahoo board will weigh a sale of its core internet business when it meets this week, according to sources.

Its meeting comes amid a broader debate about the future of the company and that of high-profile chief executive Marissa Mayer.

The Wall Street Journal first reported the possible sale of the internet business late on Tuesday. People familiar with the matter told the newspaper the board was expected to also discuss during meetings from Wednesday to Friday whether to proceed with a plan to spin off more than $30bn (£20bn) in shares of Alibaba. The company could also pursue both options, the paper said.

Marissa Mayer has come under increasing pressure over Yahoo’s financial performance

The company’s shares were up more than 7% in extended trading.

Yahoo’s core business, which includes popular services such as Yahoo Mail and its news and sports sites, could attract private equity firms, media or telecom companies.

Yahoo declined to comment on the report.

The news comes as Mayer faces growing pressure over the company’s performance. She came to Yahoo after a long stint at Google.

Mayer’s arrival kicked off heightened expectations of a quick turnaround at Yahoo, which had struggled to grow its advertising business to compete with market leaders Google and Facebook.

Hopes of a comeback crumbled as Yahoo’s plan to push mobile, video, native and social media ads – a strategy Mayer introduced in 2014 under the acronym Mavens – failed to increase revenues as desktop search ads continued to decline.

A $1.1bn deal in 2013 to acquire social blogging site Tumblr also hit snags, with investors arguing that Mayer overpaid for an unprofitable product. The deal lifted Yahoo’s user base to about 1 billion but did not bring in advertisers.
In September, Yahoo’s plans for the spinoff of its stake in Alibaba hit a roadblock when the US Internal Revenue Service denied a request to bless the transaction as a tax-free deal.

Yahoo said it planned to proceed with the spinoff despite the IRS announcement, but has not yet done so.

In November, activist investor Starboard Value asked Yahoo to drop plans to spin off its stake in Alibaba and urged the company to sell its core search and display advertising businesses instead.

During Mayer’s 13-year tenure at Google, she led the Google Earth, Gmail and Google News teams and is credited with helping create the company’s search page.