When Marissa Mayer became Yahoo CEO in 2012, it seemed like things were finally going to turn around for the once-mighty tech company. Just a year after taking over, Mayer made a bold move in purchasing the popular micro-blogging site, Tumblr, for $1.1 billion. While stocks seemed to rise a while, it quickly became evident that the major moves put out by Mayer were not paying off in the long run, and the company was still struggling. In December of 2015 the struggling company began talk of selling about $1 billion of their assets- or the company itself, to the highest bidder.
But, if Yahoo is really for sale, then what are the companies looking to buy them out? Any deal could be worth billions, and major names can open up a bidding war, which is what many hope will happen in the end. Because the higher the price Yahoo sells for, then the better it will be for the company.
Four Major Competitors for Yahoo
Verizon is one major speculation, and CEO Lowell McAdam has made no secret of his interest in the company. Verizon has already purchased AOL just a few months ago, and Wall Street seems to believe that they will purchase Yahoo as well in order to perform the long-speculated AOL-Yahoo merger.
But, Verizon is not the only company vying for ownership of Yahoo. In fact, their biggest rival, AT&T, is also considering purchasing the company. Like their rival, AT&T has a lot to gain strategically from the purchase of Yahoo and have recently made a major purchase of DirectTV in order to expand into the video market. Gaining Yahoo would help increase their entertainment presence.
Entertainment giant Disney is also considered a possibility in purchasing Yahoo, even if nothing has publicly been announced. This would prove extremely beneficial to Disney as it would help them to increase and better monetize their online presence. But, it would still be a pricey investment for Disney to make. Other entertainment companies who could possibly make the purchase include Comcast and the CBS television network.
Another major possible bidder is Time Inc. While it may seem odd for the company to be part of the bidding war for Yahoo, they are still real competition. Although they may not have as much capital as the other companies in the running, they still have the possibility of winning through the use of a Reverse Morris Trust. This would involve a multi-step process of creating subsidiaries and issuing a certain number of shares to help cover the cost.
While a change in ownership at Yahoo may not be obvious if you are not following tech news, it is going to happen. Any one of the companies listed above can end up with ownership of Yahoo, and have the potential to use it to increase their overall company value and shares. It is just a matter of who will place the winning bid and for how much.
