Yahoo might be approaching towards the end of its wonderful journey in the tech sector.
Yahoo Inc. – the tech giant that completely transformed the course of the tech fraternity – is now stumbling to keep up with its pace. It is disappointing to see that being one of the pioneers as a Web and search company, it completely failed to grow its business and directly compete against its rival, Google. It has been going through a very rough patch since the past two to three years and all the troubles it faced this time show how a tech business needs to be well ahead in the tech sector.
In case of Yahoo, it did not stay well ahead and could not keep up with the industry pace. Now it is paying the price by being left behind. Once a market leader, the company is on the verge of being sold out. In recent years, it started to lose track and almost went out of business, Google made history and lead the market with no competitive threat behind it. The only difference is that the latter kept up with the industry pace.
Despite of the fact that Yahoo has officially launched an auction process to sell its core business, it is trying for a few last attempts to change the fate, but investors and shareholders are not in favor of it. So far, CEO Marissa Mayer has been successful in persuading the board of directors to look for other options rather than selling, but the activist investor of the firm, Starboard Value, is not in favor of other options.
Furthermore, Starboard Value wants Yahoo to dismiss Marissa Mayer for her poor performance since the day she was hired. The CEO failed to turn around the fate of the company in her three years’ tenure.
Investors said to launch a proxy battle if Yahoo fails to meet all demands in the coming times. It has started to approach bidders already and is looking to receive a deal valued between $6 billion to $8 billion, according to analysts.
Numerous organizations, including Comcast Corporation and Verizon Communications, are linked with a potential deal to buy out Yahoo. Regardless of poor performances and major downfall in its business, the company has some significant allure, which the buyer can still cash in on and benefit from. Mostly, buyers are interested in the core internet and advertising business. Its core business includes Yahoo Mail, Yahoo Sports, search and advertising.
Previously, the board of directors decided to spin off the firm but Starboard Value opposed. However, this is supposed to be a more feasible option for the company to now sell its core business.
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