Yahoo Inc might have hung out a “for sale” sign, but it has not done much to improve its curb appeal.
On Tuesday, the company posted a first-quarter loss on a sharp drop in net revenue, a figure that subtracts ad commissions from total turnover. Yahoo’s net revenue fell 18 percent from the same period in the previous year to US$859 million.
It is the largest decline in Yahoo’s quarterly net revenue since the company hired Marissa Mayer as its chief executive officer almost four years ago.
Photo: AFP
The company expects an even bigger net revenue drop of 20 percent in the quarter ending in June.
Yahoo lost US$99 million during the first quarter, compared with a US$21 million profit last year. A big chunk of the loss stemmed from the cost of laying off about 1,000 workers during the quarter, a cut that chopped the company’s workforce to 9,400 employees as of last month.
However, investors are much more focused on whether the company is going to sell the bulk of its operations.
The Sunnyvale, California company announced two months ago that it is considering the sale of part or all of its Internet business instead of sticking with Mayer’s cost-cutting plan.
In a review of the first-quarter results, Mayer described the sales negotiations as a “top priority” and said the board is moving on an “aggressive calendar” to complete the process.
She did not provide a specific timetable.
Her comments aimed to debunk reports that Yahoo’s board is only making a half-hearted effort to attract bidders because she and the rest of the directors would prefer the company remain independent.
Verizon Communications Inc has publicly said it is interested in buying Yahoo. It snapped up another fallen Internet star, AOL Inc, for US$4.4 billion last year.
The Daily Mail in London also has said it was mulling a bid.
Analysts believe private equity firms that specialize in buying and turning around troubled companies are interested.
Estimates on the value of Yahoo’s Internet operations have ranged from US$4 billion to US$10 billion. Properties on the block include Yahoo’s widely used e-mail service, digital advertising tools and its still popular finance and sports Web sites.
Yahoo’s stock has rallied over the past two months amid expectations that it will divest its Internet operations. That would leave Yahoo as a holding company with valuable stakes in China’s e-commerce leader, Alibaba Group Holding Ltd (阿里巴巴), and Yahoo Japan.
Yahoo shares gained US$0.47 to US$36.80 in Tuesday’s extended trading.
Mayer and the rest of Yahoo’s board could be ousted if the company does not sell and its financial results continue to worsen.
Activist investor Starboard Value has nominated a slate of candidates to replace Yahoo’s nine-member board in an election at the company’s annual meeting, which might be held in late June.
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