The hope after the appointment of Marrisa Mayer as CEO and president of Yahoo was that she could steer the company away from certain doom. Unfortunately, despite Marrisa’s acumen, the search giant has found itself floundering in the wake of plans to sell assets and stay afloat.
Petri.com reports that the board will be meeting this week to talk about selling off some of the core businesses of Yahoo. These may include Yahoo.com and Yahoo Mail, which are a few of the things Yahoo is best known for.
The problems stems from a number of things. These include failing attempts to push into the video, advertising and mobile scenes. In fact, back in October, Variety reported on how Yahoo’s foray into the realm of online televisions netted them a $42 million loss.
However, the biggest contributor to Yahoo’s slow death involves its stake in a Chinese e-commerce company called Alibaba. Alibaba was founded in 1999 and has grown significantly in the past 16 years. At the moment the eCommerce giant is not only a self-sustaining online system, but in 2012 its web portals (used to handle online transactions) netted 1.1 trillion yuan in sales. It’s also worth a cool $231 billion.
Yahoo’s partnership with Alibaba started in 2005, when Yahoo secured a 40% stake in Alibaba. This was followed by the formation of the China Yahoo domain www.yahoo.com.cn, which provides Yahoo brand services to folks in China.
This 40% stake is estimated to be worth about $30 billion. Their other overseas asset called Yahoo Japan is worth about $8.5 billion, and Yahoo itself is standing at a total market value of $31 billion. Even in considering the other assets, if you take out China Yahoo and Yahoo Japan, the company is left with a total value running into the negative.
On top of this the company is receiving pressure from the IRS on paying out taxes for selling off its stake in Alibaba. The amount of taxes could end up running into the billions, further compounding their financial woes.
So we can see that Yahoo is in some hot financial water at the moment. Whether or not the board meeting will provide a feasible solution remains to be seen.
What do you think? Is the end of Yahoo looming or will they be bought up and reinvigorated?
I feel ambivalent about this. I don’t particularly see this as a huge loss to the world of technology considering that Yahoo has never contributed all that much beyond a search engine, a run-of-the-mill email service and bringing back Community.