Yahoo – the much scrutinized internet search and media company – was put up for sale earlier this spring, and the first round of bids are now in for consideration. With an internet mainstay’s future in the balance, the sale has been of interest to everyone from casual observers to financial page readers to search marketing experts.
While Yahoo is facing financial turmoil and is often viewed as a poor cousin to the internet’s twin giants of Google and Facebook, it remains the third-most visited desktop domain on the web. This makes Yahoo enticing to any company bold enough to think it can pull-off a turn-around.
Here’s everything you need to know about the current state of the sale and what it could mean for the web and search marketing in general.
Company Caught in Financial Meltdown
When Yahoo’s sale was announced earlier this year, the company released financial information that gave the public an inside look at the financial state of the company. The results were not pretty. Despite a three-year turnaround effort helmed by CEO Marissa Mayer, the company failed to anticipate the rise of mobile devices. Consequently, the company is projecting a 20% loss on earnings in 2016 compared to 2015.
The company’s finances are believed to have sparked the sale, as Yahoo investors became increasingly vocal about the company’s sinking revenue figures. This has led to chatter among business insiders and search marketing professionals about Mayer’s future and the direction new ownership will take for Yahoo’s search and media interests.
Verizon & Investment Firms Lead Bidders
Yahoo’s first wave of bids saw proposals from 10 different companies, with bids ranging between $4 billion and $8 billion. The majority of these bids are from investment firms and private equity companies, including TPG, YP Holdings, and a partnered bid by Bain Capital and Vista Equity Partners.
The outlier among the bidders is Verizon. The media conglomerate already owns one former internet giant in its subsidiary, AOL. Now, the company is believed to be gunning hard for Yahoo, which could give Verizon a stronger foothold in online media.
Search marketing experts expect that any bidder that attempts to resurrect Yahoo will bring wholesale changes to several aspects of the company’s business. One of these will be mobile, where Yahoo has struggled. As successful turnaround would mean increased focus on Yahoo among search marketing efforts.
Where’s Google in All of This?
With Yahoo still claiming a substantial stake of desktop traffic, many expected the company’s leading rival, Google, to consider a bid. Reports in early April indicated that Alphabet, Google’s parent company, was weighing the pros and cons of entering a bid. Ultimately, the company declined to do so.
Most business and search marketing experts believe that Google could be subject to severe regulatory backlash were such a sale to go through and that Google likely considers itself well-positioned enough without subsuming Yahoo.
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