We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Will Verizon and AT&T Submit Third-Round Bids for Yahoo?
Read MoreHide Full Article
According to a report by Reuters, U.S. telecom behemoths Verizon Communications Inc. (VZ - Free Report) and AT&T Inc. (T - Free Report) are set to bid for the third time for the struggling web-portal operator Yahoo! Inc. . In addition, a consortium led by Quicken Loans Inc. founder Dan Gilbert and backed by Berkshire Hathaway Inc. Chairman Warren Buffett is expected to bid for the third and final round.
Yahoo has reportedly received more than 10 initial bids including several private equity firms. At present, Verizon and AT&T appear to be best suited to merge Yahoo into their online platforms. Internet-based information service provider giant Yahoo is currently struggling with its core businesses namely mail service, online sports, financial and general news sections and its vital online advertising technology, which includes the video advertising platform, BrightRoll.
In Feb 2016, Yahoo disclosed that it would consider "strategic alternatives" for its core businesses, including an outright sale or a spin-off. Notably, Yahoo boasts a significant user base that trails only Google of Alphabet Inc. (GOOGL - Free Report) and Facebook Inc. . Yahoo was initially expecting to collect $4 billion to $8 billion from the sale of its core Internet-based products. The company was also expecting to collect more than $1 billion from the sale of its non-core assets which consist of its 3,000 patents and real estate properties.
According to Reuters, Verizon’s second bid was in the range of $3 billion to $3.5 billion for the core assets of Yahoo while AT&T’s bid was around $5 billion which include both core and non-core assets. Both bid sizes were much less than what were initially anticipated by Yahoo. The reason may be the dwindling business of Yahoo. According to the research firm eMarketer Inc., this year Yahoo will control just 1.5% of the overall digital advertising market, down from 2.1% in 2015.
Bottom Line
Yahoo has not even been able to maintain its sales and profits, let alone grow. This is very disconcerting for a company that has been trying to turn itself around for many years now. Thus, any buyer putting high stakes on the bidding table will be great news for shareholders. On the other hand, Yahoo employees stand to benefit if either of the telecom giants vertically integrates Yahoo’s assets more profitably. Only time will unravel what is in the cards for this once leading Internet giant.
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 >>
Unique Zacks Analysis of Your Chosen Ticker
Pick one free report - opportunity may be withdrawn at any time
Image: Bigstock
Will Verizon and AT&T Submit Third-Round Bids for Yahoo?
According to a report by Reuters, U.S. telecom behemoths Verizon Communications Inc. (VZ - Free Report) and AT&T Inc. (T - Free Report) are set to bid for the third time for the struggling web-portal operator Yahoo! Inc. . In addition, a consortium led by Quicken Loans Inc. founder Dan Gilbert and backed by Berkshire Hathaway Inc. Chairman Warren Buffett is expected to bid for the third and final round.
Yahoo has reportedly received more than 10 initial bids including several private equity firms. At present, Verizon and AT&T appear to be best suited to merge Yahoo into their online platforms. Internet-based information service provider giant Yahoo is currently struggling with its core businesses namely mail service, online sports, financial and general news sections and its vital online advertising technology, which includes the video advertising platform, BrightRoll.
In Feb 2016, Yahoo disclosed that it would consider "strategic alternatives" for its core businesses, including an outright sale or a spin-off. Notably, Yahoo boasts a significant user base that trails only Google of Alphabet Inc. (GOOGL - Free Report) and Facebook Inc. . Yahoo was initially expecting to collect $4 billion to $8 billion from the sale of its core Internet-based products. The company was also expecting to collect more than $1 billion from the sale of its non-core assets which consist of its 3,000 patents and real estate properties.
According to Reuters, Verizon’s second bid was in the range of $3 billion to $3.5 billion for the core assets of Yahoo while AT&T’s bid was around $5 billion which include both core and non-core assets. Both bid sizes were much less than what were initially anticipated by Yahoo. The reason may be the dwindling business of Yahoo. According to the research firm eMarketer Inc., this year Yahoo will control just 1.5% of the overall digital advertising market, down from 2.1% in 2015.
Bottom Line
Yahoo has not even been able to maintain its sales and profits, let alone grow. This is very disconcerting for a company that has been trying to turn itself around for many years now. Thus, any buyer putting high stakes on the bidding table will be great news for shareholders. On the other hand, Yahoo employees stand to benefit if either of the telecom giants vertically integrates Yahoo’s assets more profitably. Only time will unravel what is in the cards for this once leading Internet giant.
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 >>