Yahoo CEO Paints Bright Picture With Potential Sale Looming

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By Associated Press | Updated: 1 July 2016 11:47 IST
Yahoo CEO Marissa Mayer tried to hit all the upbeat notes during an annual shareholders meeting as the company considers selling its slumping internet operations.

The 45-minute gathering Thursday was a routine affair that provided no insight into whether Yahoo's board is leaning toward a sale after four months of wrangling, or will entrust the beleaguered Mayer to engineer a long-promised turnaround.

Mayer told the small turnout of shareholders that Yahoo "is making great progress on our process" without specifying when a decision might be made. Most analysts expect Yahoo to make a choice this summer.

If Yahoo sells, Mayer will probably lose her job after four years as CEO and walk away with a $55 million severance package. Activist shareholder Starboard Value had threatened to lead a mutiny aimed at ousting Mayer until Yahoo agreed two months ago to give the fund four seats on its 11-member board.

Mayer, 41, defended her efforts to broaden Yahoo's audience and sell more advertising by focusing more on mobile apps and adding hundreds of other features to its array of digital services during her nearly four-year tenure.

"We are proud of our achievements overall in our products," she said.

Most of those products are now on the auction block. Various media outlets have reported that Yahoo has received offers exceeding $3 billion for a portfolio of digital services that includes the company's email, news, sports and finance sections.

The bidders include Verizon Communications, a group led by Quicken Loans founder Dan Gilbert, and various private equity firms that specialize in buying struggling companies at discount prices.

Yahoo has steadfastly refused to provide any updates on its deliberations since its board hired investment bankers and other advisers to round up prospective buyers four months ago. Mayer told shareholders Thursday that she has been encouraged by the level of interest in Yahoo's internet business, though most analysts initially thought the company would fetch more than the $4.4 billion that Verizon paid for AOL last year.

The company restricted attendance to Thursday's meeting in Santa Clara, California, to shareholders and their appointed representatives, forcing The Associated Press and other media to watch the proceedings on a webcast. Yahoo also recently began soliciting bidders for a package of about 4,000 technology patents, representing most of its intellectual property.

Yahoo's auction stems from the company's inability to boost its revenue during the past eight years even though advertisers have been steadily increasing the amount of money on digital marketing. Its revenue has fallen from $5.1 billion in 2008 to $4.1 billion last year, with another decline of as much as 17 percent to $3.4 billion projected for this year. Most of Yahoo's current market value of $35 billion is locked up in stakes that it holds into China's e-commerce leader, Alibaba Group, and Yahoo Japan.

In a tacit acknowledgement that her previous turnaround plans had gone awry, Mayer pivoted at the beginning of the year and started to close Yahoo's least profitable services, including a video operation and digital magazines hatched during her reign.

Mayer is also laying off 15 percent of Yahoo's workforce to whittle the payroll to 9,000 employees and trying to pull off a spin-off that would put the internet operations into a separate company. Yahoo Inc. would then become a holding company for Alibaba Group, and Yahoo Japan.

"We need to make sure every product counts and every market matters," Mayer told shareholders Thursday.

Yahoo's stock ended Thursday up 70 cents, or almost 2 percent, at $37.56. It is up almost 13 percent in 2016.

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