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Bids On Yahoo Will Be Yahoo-ingly Disappointing

These are not the numbers Marissa was expecting to see.

Sure, Marissa Mayer inherited a troubled business and then spent a lot of money making hires and acquisitions that made it even worse, but it's still a huge internet company and she assumes that anyone trying to buy it will behave as such.

After all, purported suitors like Verizon, Warren Buffett and former CEO Ross Levinsohn are all dealing with pretty deep pockets, so they should be ready to pony up big money for the right to try and put out the garbage fire that is Yahoo. Marissa is known to be thinking that somewhere in the neighborhood of $4 billion to $8 billion should do it, but all interested parties should feel free to go higher.

So, let's see those bids gentlemen...

Verizon Communications Inc. and others are expected to bid around $2 billion to $3 billion in the auction for Yahoo Inc.’s core business, less than what the troubled Internet pioneer was expected to fetch, according to people familiar with the matter.

Umm, who can Marissa start blaming for these paltry digits?

Bidders have lowered their expected prices following weeks of sale presentations by Yahoo Chief Executive Marissa Mayer at the company’s Sunnyvale, Calif., headquarters and its disclosure of data that detailed the company’s flagging prospects.

Well, that should be an awkward look in the mirror.

Yahoo last month issued a reminder of the difficulties it faces when it said first-quarter revenue dropped 18% to $859.4 million, excluding commissions paid to search partners. That is the first time that figure has fallen below $1 billion since Ms. Mayer took the reins nearly four years ago.
The segment of Yahoo’s business that Ms. Mayer has designated as its growth engine is slowing down dramatically. Revenue from “mavens”—a financial metric the company introduced last year to track mobile, video, native and social ads—rose 6.8% from the prior year to $390 million. That compares with 26% in the fourth quarter, 43% in the third period and 60% in the second quarter.

This is a bit of a pickle. Marissa just kind of finished fighting a brutal shareholder battle by sort of promising to make a sweet deal on the sale of Yahoo's now-infamous "core business."

What does she do if these bids don't get sexier?

In meetings with potential suitors, Ms. Mayer has acknowledged that the company is still in the middle of a turnaround, according to one person who attended a meeting.
Should bids come in much lower than expected, Yahoo could abandon the sale and proceed with her turnaround effort.

Yahooy vey.

Yahoo Suitors Expected to Bid $2 Billion to $3 Billion, Below Past Indications [WSJ]


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