Dive Brief:
- Microsoft is considering a role in the potential purchase of Yahoo's core internet business, holding meetings with investors about contributing to financing, Re/code reported Thursday.
- Microsoft is focused on maintaining its relationship with Yahoo, preserving its longstanding agreements for search and advertising, according to a Reuters report.
- Late last week, activist hedge fund Starboard Value LP moved to overthrow the entire board of Yahoo, including Chief Executive Marissa Mayer.
Dive Insight:
Yahoo has been struggling in the face of stiff competition from Google and Facebook. Yahoo's revenue grew 6.8% in the third quarter of 2015, but profits dropped to $76 million. The company also saw several key staff members leave. In February, Yahoo said it had formed a committee to seek out and engage with potential buyers for its core Web assets, which include search, mail and its news sites. At the time, Verizon Communications Inc., Comcast Corp. and AT&T Inc. were among the rumored potential buyers.
As of now, Microsoft has not committed to any deal, but any proffered money could help Microsoft preserve its partnership with Yahoo and make a purchase more appealing to potential buyers. This is not the first time Microsoft has shown interest in Yahoo. In 2008, Microsoft made a hostile bid to buy the company for about $45 billion.
Through the poor market performance and rumored sale, Yahoo's leadership has been in turmoil.
Starboard's CEO Jeff Smith said Yahoo needs a new board to bring "credibility to a process that has been publicly criticized repeatedly for being too slow, fraught with conflicts of interest and very difficult for highly qualified and motivated strategic and financial buyers to access much-needed diligence information,” Re/code reported.
