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Yahoo to Spin Off Its Core Businesses

nytimes.com

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Re: Yahoo to Spin Off Its Core Businesses

#131

Post by kaizendad »

chollida1 wrote: post #17

Yahoo had to do this. They had been hanging onto the belief that the IRS wouldn't tax their Alibaba spin out, a belief that they and their tax accountants alone believed. Most telling is that Yahoo was up after the markets closed on this news. Heck Bloomberg just sent me a note saying the sentiment of the news on Yahoo was very positive, even the machines like this news:) Sadly this probably means 3 things are going…

This is cleverer than people are giving them credit for. It delivers immediate value to shareholders; it delivers opportunities for long term growth to shareholders; it creates one valuable Asian property that can acquire other properties and continue to deliver shareholder value; it creates a US company that is easier to acquire than it used to be, without the Alibaba share, and thus could be bought by a big media company that values all the core assets and will keep the engineers.

Everyone wins here. Managers win, of course, but shareholders, who have been patient, get short-term returns and the potential for long-term ones as well. Employees will see their jobs stay, because of this repackaging.

Yes, Mayer will be gone in a year, replaced by someone with experience selling a company. But it's been a good run. She turned Yahoo from a place with mediocre engineers into a decent place to work; she resuscitated existing brands and gave them a place in the world; and now she did some reasonably clever financial engineering.

Re: Yahoo to Spin Off Its Core Businesses

#132

Post by [deleted] »

cmdkeen wrote: post #65
netcan wrote: post #33

I'm not sure I quite understand. The article puts Yahoo's Alibaba stake at 31bn. Google finance is reporting Yahoo's market cap as 32.75bn. Does this mean that Yahoo's non-Alibaba value is a rounding error?

It may be worth that but as stated in the article it can't be realised without tax bill potentially up to $10bn.

[deleted]

Re: Yahoo to Spin Off Its Core Businesses

#133

Post by netcan »

cmdkeen wrote: post #65
netcan wrote: post #33

I'm not sure I quite understand. The article puts Yahoo's Alibaba stake at 31bn. Google finance is reporting Yahoo's market cap as 32.75bn. Does this mean that Yahoo's non-Alibaba value is a rounding error?

It may be worth that but as stated in the article it can't be realised without tax bill potentially up to $10bn.

OK. That makes a little more sense. The market might be valuing that at 5bn or so.

Re: Yahoo to Spin Off Its Core Businesses

#134

Post by scholia »

yeukhon wrote: post #4

Can someone explain why do business like to create new company? What are the benefits for the financial return other than having a book reporting individual revenue? In the end, aren't they going to be under the same parent company, which, if one wishes, can actually challenge and even overrule the child company CEO's decision behind the scene? HP, Google, now Yahoo.

It's usually about "shareholder value". In other words, the two new companies will be worth more (on Wall Street) than the old company.

In HP's case, the idea was that the shares in the enterprise company were depressed by worries about the viability of the PC/printer company. In Yahoo's case, the problem is that Yahoo's core business has little or no value (ie it's not reflected in the price of the shares) compared with the value of its shareholdings in Alibaba and Yahoo Japan.

In Google's case, it's currently just re-arranging deckchairs. However, the underlying problem is that Google's share price reflects Google Search, and does not reflect all the other businesses that now come under the Alphabet umbrella.

Re: Yahoo to Spin Off Its Core Businesses

#135

Post by valhalla »

MrApathy wrote: post #91
fluxquanta wrote: post #29

Earlier quoted context omitted.

I can't speak for chollida1, but for me as an "older millennial" (28) Yahoo was how I came to discover the internet. Between the chats, instant messenger, search before Google, multiplayer games online with strangers (albeit simple ones like chess and poker), and Geocities it was my first taste of the types of things I do online to this day. I think it's okay to mourn a bit for how we remember the company.

As an even older millennial (35), I have very fond memories of Yahoo. I remember receiving a two-disk copy of Netscape Navigator from a local ISP at a computer show in early 1995 and setting the home-page immediately to Yahoo. At the time I remember seeing hard copies of "The Internet Yellow Pages" at the local Barnes and Noble, but most search was through Yahoo or Alta Vista. Back then AV had several fewer orders of…

I'm a young millennial and even though Google was more or less my first search engine/portal (I used Alta Vista until my 1st grade teacher showed me Google around '99) I also have fond memories of Yahoo!.

I won a Final Four bracket against high school classmates on the site's fantasy sports page and knowing nothing about college basketball. I made $150 from that.

Even though they clearly made strategic mistakes and Mayer's revival may have been too little too late it's still sad when an "old-school" tech firm goes under, especially one that touched so many lives.

Re: Yahoo to Spin Off Its Core Businesses

#137

Post by charlesdm »

kaizendad wrote: post #131
chollida1 wrote: post #17

Yahoo had to do this. They had been hanging onto the belief that the IRS wouldn't tax their Alibaba spin out, a belief that they and their tax accountants alone believed. Most telling is that Yahoo was up after the markets closed on this news. Heck Bloomberg just sent me a note saying the sentiment of the news on Yahoo was very positive, even the machines like this news:) Sadly this probably means 3 things are going…

This is cleverer than people are giving them credit for. It delivers immediate value to shareholders; it delivers opportunities for long term growth to shareholders; it creates one valuable Asian property that can acquire other properties and continue to deliver shareholder value; it creates a US company that is easier to acquire than it used to be, without the Alibaba share, and thus could be bought by a big media c…

Did she? Maybe I'm a bit more sceptical, but what did she actually achieve?

1. She failed at putting Yahoo back on the map. She spent billions on acquiring businesses that bring in close to no revenue. Maybe it's a great place to work, but if there's no money coming in, it won't stay great long.

2. She failed at financial engineering; she couldn't even get a tax free spinoff through.

I would've been happy to cut her some slack if she did one of these things right, and messed up the other one. Some people aren't meant to be product people and others just aren't financial engineers. But this is basically throwing in the towel.

Don't forget, this idea of a reverse spinoff didn't come from Marissa. It came from an activist investor, who are basically, master financial engineers.

Re: Yahoo to Spin Off Its Core Businesses

#138

Post by peter303 »

ChuckMcM wrote: post #120

Certainly the end of the beginning. Yahoo!, one of perhaps a handful of companies, was the first "Internet"[1]. Those companies blazed an interesting trail and brought the mainstream population of the US into the "online" world. That they emerged across the chasm that was the dot.com crash, was a testament to the amount of momentum they carried with them. I have a tremendous amount of respect for them, but even with…

MicroSoft made a major bid for Yahoo several years ago, but Yang want more money. MicroSoft hoped there would be synergy between combining MSN and Yahoo.

Re: Yahoo to Spin Off Its Core Businesses

#140

Post by wavefunction »

aswanson wrote: post #72
FussyZeus wrote: post #55

Earlier quoted context omitted.

The old ads were great, from the early 00s? Always ended with the dude screaming YaaahooooOOOOOOOOOO!!!!!! Memories.

I always hated those ads and also thought the name was silly, even at the time. But hey, they're still here.

The name was from a much more optimistic time in the history of the Internet, when everything was shiny and brand new and less slick and calculated.
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