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Yahoo Puts Patents Up for Sale, Hires Investment Bank
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Yahoo! Inc. is looking to monetize its intellectual property and has declared an auction to sell around 3000 patents.
The confirmation statement from a Yahoo spokeswoman reads,” This represents a unique opportunity for companies operating in the internet industry to acquire some of the most pioneering and foundational patents related to web search and advertising. ”
According to a statement from the company in March, it expects $1 billion to $3 billion from the sale of its non-core assets that includes patents and properties.
The company has hired a boutique investment bank Black Stone IP to help it with the sale of patents that date back to 1996 and are related to Yahoo’s original search technology, e-commerce and online advertising.
It has sent letters to potential buyers informing them about the auction and the mid-June deadline for preliminary bids.
Potential Buyers
According to Maulin Shah, managing attorney at Envision IP, a law firm specializing in patents, Microsoft Corporation (MSFT - Free Report) , and Alphabet Inc. (GOOGL - Free Report) would obviously test their luck. However, there has been no confirmation from either of the companies.
Yahoo declared the patent auction in the middle of its core business sale probably to sweeten the deal for potential buyers.
According to a Wall Street Journal (WSJ) report on Monday, Verizon Communications Inc. (VZ - Free Report) , one of the leading contenders to buy Yahoo, will submit a second round bid worth $3 billion for the company’s core Internet business.
Verizon however is not interested in Yahoo’s non-core assets such as patents and real estate, according to the Journal. Private-equity firm TPG may also submit a second round bid, per the report.
The Ill-fated Company
With about 1 billion users, Yahoo is one of the largest online players in the world. However, the company has been facing some serious challenges for years. It has been losing its digital advertising foothold to competitors like Facebook and Twitter.
Since 2015, more than a third of the company’s employees including some of CEO Marissa Mayer’s key lieutenants have left. She announced hefty packages to check the brain drain but couldn’t regain the trust of senior employees.
In April, Yahoo managed to avert a proxy war when it reached a settlement with activist shareholder Starboard Value LP, which was pushing to replace Yahoo's entire board. Under the agreement, Yahoo agreed to add four independent directors of Starboard including CEO Jeffery Smith.
Therefore, under Mayer, Yahoo is looking to sell itself to the best bidder after an unsuccessful turnaround effort and mounting pressure from investors.
Currently, Yahoo is a Zacks Rank #3 (Hold) stock.
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Yahoo Puts Patents Up for Sale, Hires Investment Bank
Yahoo! Inc. is looking to monetize its intellectual property and has declared an auction to sell around 3000 patents.
The confirmation statement from a Yahoo spokeswoman reads,” This represents a unique opportunity for companies operating in the internet industry to acquire some of the most pioneering and foundational patents related to web search and advertising. ”
According to a statement from the company in March, it expects $1 billion to $3 billion from the sale of its non-core assets that includes patents and properties.
The company has hired a boutique investment bank Black Stone IP to help it with the sale of patents that date back to 1996 and are related to Yahoo’s original search technology, e-commerce and online advertising.
It has sent letters to potential buyers informing them about the auction and the mid-June deadline for preliminary bids.
Potential Buyers
According to Maulin Shah, managing attorney at Envision IP, a law firm specializing in patents, Microsoft Corporation (MSFT - Free Report) , and Alphabet Inc. (GOOGL - Free Report) would obviously test their luck. However, there has been no confirmation from either of the companies.
Yahoo declared the patent auction in the middle of its core business sale probably to sweeten the deal for potential buyers.
According to a Wall Street Journal (WSJ) report on Monday, Verizon Communications Inc. (VZ - Free Report) , one of the leading contenders to buy Yahoo, will submit a second round bid worth $3 billion for the company’s core Internet business.
Verizon however is not interested in Yahoo’s non-core assets such as patents and real estate, according to the Journal. Private-equity firm TPG may also submit a second round bid, per the report.
The Ill-fated Company
With about 1 billion users, Yahoo is one of the largest online players in the world. However, the company has been facing some serious challenges for years. It has been losing its digital advertising foothold to competitors like Facebook and Twitter.
Since 2015, more than a third of the company’s employees including some of CEO Marissa Mayer’s key lieutenants have left. She announced hefty packages to check the brain drain but couldn’t regain the trust of senior employees.
In April, Yahoo managed to avert a proxy war when it reached a settlement with activist shareholder Starboard Value LP, which was pushing to replace Yahoo's entire board. Under the agreement, Yahoo agreed to add four independent directors of Starboard including CEO Jeffery Smith.
Therefore, under Mayer, Yahoo is looking to sell itself to the best bidder after an unsuccessful turnaround effort and mounting pressure from investors.
Currently, Yahoo is a Zacks Rank #3 (Hold) stock.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>