Yahoo posts $99.2m loss amid pitched battle with shareholders

Yahoo announced falling revenues and a quarterly loss of $99.2m on Tuesday as the ailing internet business looks for a buyer.

The company reported revenue of $1.09bn, down 11% from the same time last year. The fall shows continuing deterioration in Yahoo’s business but was better than analysts had expected.

Marissa Mayer, Yahoo’s CEO, gave little away about the company’s sale plans. In answer to a question about the proposed “reverse-spin” sale of Yahoo’s core internet assets, Mayer said it was “something the board and the strategic review committee continue to contemplate”.

“The reverse-spin remains an alternative,” she said. “We are doing some work there, but the larger work is being done around the process of the possible sale.” The company was pursuing both a sale of Alibaba and a straightforward sale simultaneously, said CFO Ken Goldman: “Much of that is in parallel.”

The financial update comes amid a pitched battle with shareholders and in the shadow of multiple bids for its core businesses.

Mobile revenue was up from $234m to $260m but the company’s much more substantial desktop revenue was down from $873m to $774m.

Yahoo has been criticized by investors, including activist shareholders at Starboard Value, for a decline in revenues generated by its main advertising-related businesses.

Even as those businesses decline, however, the company’s stake in China’s e-commerce giant Alibaba has become far and away its most valuable asset, so much so that the company has sought to sell the businesses most closely associated with its brand – email, advertising and news – and leave shareholders holding only that most lucrative part of the company.

A second, less-discussed asset in play is the company’s Yahoo Japan business, which is co-owned with Japanese telecoms giant Softbank. A stake of 35.5% of Yahoo Japan is worth about $9bn according to the Wall Street Journal. The fundamentals of the business are considered to be in far better shape than those of Yahoo proper.

Yahoo is digging in: last week the company again backed embattled CEO Marissa Mayer, making it more difficult to dismiss the executive and guaranteeing her additional compensation should she be fired in a “change of control” situation – if the company were sold, in other words. The company has also appointed two new board members.

Time, Alphabet, Comcast, ATT and InteraActive Corp are all reportedly out of the running to buy the company’s non-Alibaba assets, leaving few other suitors beyond Verizon. If the company’s assets aren’t sold by Yahoo’s shareholder meeting later this spring, Starboard will try to replace every member of Yahoo’s board.

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