Yahoo is for sale, and Bloomberg is reporting that potential first-round bidders include Verizon, which had confirmed interest, and Alphabet, Google’s parent. It’s a developing story.
Earlier, Re/Code posted a story based on leaked access to the “book” (Yahoo financials and metrics) that is being distributed to potential bidders via Yahoo’s bankers. According to that report, “Yahoo is estimating that revenue is dropping close to 15 percent and earnings by over 20 percent” this year. That makes the company’s positioning highly problematic. It’s not a growth story, in other words.
However, according to comScore data, Yahoo remains one of only a small number of big internet properties and brands. It is the third most-visited desktop domain after Google and Facebook. It also has substantial mobile traffic.
Perhaps more interesting is the following slide that shows Yahoo’s audience reach is as large as the major US television broadcast networks.
For Verizon, the Yahoo brand, which is stronger than AOL, and its audience reach would be attractive. That would also be true for selected others. For Google/Alphabet, it’s harder to see the appeal. Yahoo has roughly 12 percent of the US search market, and any Google–Yahoo combination would face massive regulatory scrutiny and potential resistance.
In the past, besides Google and Verizon, the following companies have been linked to a potential Yahoo acquisition:
- IAC/InterActive Corp.
- News Corp
- TPG Capital
The Bloomberg report asserts that AT&T and Comcast have decided against bidding and that first-round bids are due next Monday. It also says that Microsoft, which made a massive but failed buyout attempt during the Steve Ballmer era, won’t participate. Under CEO Marissa Mayer’s leadership, Yahoo has gradually unraveled its search tie-up with Redmond, which was negotiated by Ballmer and former Yahoo CEO Carol Bartz.
A Yahoo sale seems highly likely, based on all the signals and available information. The major question is to whom and for how much? Yahoo’s market cap is currently about $35 billion.