As Yahoo! Inc. (NASDAQ:YHOO) Board of Directors are mulling selling the core business of the company, the number of potential buyers could be huge. The Board is going to sit in a meeting this week that will decide the fate of its core business that includes media, e-mail and advertising division of the company. After the sale, Yahoo will be left with a huge stake spinoff in Alibaba and Yahoo Japan. While the possibility of a sale was high, the board could also decide not to sell the entire core business and just some parts of it.
As talks of a sale hit the markets, speculation on which companies could buy the core business of Yahoo is doing the rounds. As per the Wall Street Journal, private equity companies, Verizon Communication and IAC/ InterActive Corp were potential buyers. The hopes of the deal had a positive impact on the shares of the company that traded 5% higher on Wednesday while analysts pondered over the question whether Yahoo was valuable or not.
Analyst Views
SunTrust Robinson Humphrey analyst Bob Peck said that the Yahoo website has over a billion monthly users and the advertising expertise that could help a business to grow.
Cowen’s Internet industry research head John Blackledge said that Yahoo’s core business was expected to generate $780 million in 2016 after excluding taxes and other expenses. S&P Capital IQ analyst Scott Kessler said that even though the company was underperforming at present, it was a global giant and offered unsurpassed growth potential and thus its acquisition would have many companies interested.
Better 3Q15 For Core Business
Yahoo did not comment on the sale talk and has inked a search ad agreement in October with Google and has also registered some growth in the advertising business this year. In 3Q15, the revenue of the company was up to $1.2 billion that was 7% higher than in 3Q14. The Mobile, video, native, and social advertising business of the company alone reported a 43% rise to $422 million.
Even if Yahoo! Inc. (NASDAQ:YHOO) decides to sell the core business, the process would be a long one but some analysts feel that the sale could also spell doom for the company as this was the right time for the company to grow the core business and earn major revenue from it.
