Tue, Jan. 27, 4:14 PM
- Along with its Q4 results, Yahoo (NASDAQ:YHOO) announces its board has "authorized a plan for a tax-free spin-off of the company's remaining holdings in Alibaba Group (NYSE:BABA) into a newly formed independent registered investment company (SpinCo)."
- Shares in the SpinCo will be "distributed pro rata to Yahoo shareholders, resulting in SpinCo becoming a separate publicly traded company." After the spinoff, Yahoo will own its core business and a 35.5% stake in Yahoo Japan. SpinCo will assume no debt in the deal, and Yahoo will retain its cash.
- The spinoff is expected to be completed in Q4 2015, after a one-year lockup on Yahoo's Alibaba stake expires.
- Yahoo's 384M-share (15%) Alibaba stake has a current market value of $39.5B. The company closed today with a total market cap of $46.7B.
- Yahoo has jumped to $51.08 in AH trading. Alibaba is fractionally higher.
Thu, Jan. 8, 11:39 AM
- Though Marissa Mayer (NASDAQ:YHOO) is reportedly uninterested in a deal and Tim Armstrong (NYSE:AOL) has dismissed the M&A speculation swirling around his company, activist Starboard Value is once more reiterating its call for a Yahoo/AOL merger.
- Starboard argues a merger would yield cost synergies of $1B-$1.5B/year, help Yahoo carry out "a tax-efficient separation" of its Alibaba/Yahoo Japan stakes, and create "a strong growth platform given AOL's progress in mobile and video advertising."
- The firm also says it's "increasingly concerned" about reports stating Yahoo is thinking of making a big media acquisition with its Alibaba IPO proceeds. In addition, it's not happy with speculation Yahoo is "considering a cash-rich split-off as a structure to separate its non-core minority equity interests," rather than "a spin-off structure or other available alternatives to unlock the full value of the stakes in Alibaba and Yahoo Japan."
- Yahoo has said it will offer more details about its plans to tax-efficiently monetize its remaining Alibaba stake during its Q4 earnings CC (set for Jan. 27).
- Both Yahoo and AOL are rallying. The Nasdaq is up 1.7%.
Thu, Jan. 8, 4:43 AM
- "There's always speculation around us because we have taken a company that was not doing well and ended 2014 with two straight years of growth," announced AOL (NYSE:AOL) chief executive Tim Armstrong, dismissing talks of possible mergers.
- The company had recently been linked to rumors of a possible joint venture with Verizon (NYSE:VZ) and a merger with Yahoo (NASDAQ:YHOO).
- Previously: Verizon CEO throws cold water on AOL acquisition rumor (Jan. 06 2015)
Fri, Jan. 2, 9:35 AM
- "For sure, [Marissa] Mayer and Yahoo (YHOO +0.3%) considered acquiring Scripps Networks (SNI +2.7%)," writes BI's Nicholas Carlson, citing two sources. He also reports hearing from a media industry source there were "pretty active" rumors during the summer that Yahoo, which just received an Alibaba IPO windfall, wanted to buy CNN (NYSE:TWX).
- Carlson, whose critical NYT Magazine column on Mayer (adapted from a new book) has drawn plenty of attention, reports Yahoo initially entered into talks with Scripps to acquire The Food Network, and that "the possibility that Yahoo might acquire all of Scripps" later entered into the discussion. Aside from The Food Network, Scripps owns the Travel Channel, HGTV, and DIY Network.
- Among the reported reasons for Yahoo's interest in Scripps: Many of its media brands cater to women "25 or 35 and older" (a key Yahoo demographic); Scripps has very brand advertiser-friendly content; Yahoo could distribute its original content across Scripps' platforms; and Yahoo's salesforce could offer joint TV/Web ad packages.
- A deal for The Food Network alone is arguably more plausible than one for the whole of Scripps, given: 1) Scripps has a $10.6B valuation, and could cost several billion more to acquire. 2) Yahoo hasn't made any giant media acquisitions during the Mayer era, and has instead focused its content investments on financing original material and hiring well-known media personalities (such as Katie Couric and David Pogue).
- Update: Variety reports Yahoo has "mulled buying Food or other Scripps properties internally," but adds the company "has not — either formally or informally — ever [approached] SNI about a potential deal."
Nov. 19, 2014, 4:11 PM
- Yahoo (YHOO) "has been ferreting away over the past few weeks on several more big acquisitions, largely aimed at helping its flagging display business," Kara Swisher reports. Well-funded ad tech startups MediaMath, RadiumOne, and Turn are reportedly among the targets being considered.
- All three companies operate in the fast-growing market for programmatic (automated) ad buys, which presents challenges for Web publishers such as Yahoo to go with opportunities. RadiumOne was once believed to be hatching IPO plans.
- The ink is barely dry on Yahoo's $640M deal to buy video ad tech platform BrightRoll, whose advertiser-facing solutions include a programmatic buying platform. Four months ago, Yahoo struck a deal to buy Flurry, a provider of mobile analytics tools and an in-app ad network.
- Swisher also reports Yahoo has hired consulting giant McKinsey and "a spate of banks" (including Goldman and JPMorgan) to advise it as it continues exploring options to tax-efficiently monetize its Alibaba/Yahoo Japan stakes.
Nov. 17, 2014, 3:38 AM
- Amid a campaign to merge AOL (NYSE:AOL) and Yahoo (NASDAQ:YHOO), activist investor Starboard Value has revealed that it bought a 2.4% stake in AOL in the third quarter.
- Starboard also took a stake in Yahoo during the same period, urging CEO Marissa Mayer to consider a combination of the two companies.
- Starboard has disclosed the size of its position in Yahoo, listing 7.7M shares, or about a 0.8% stake, putting it just outside the list of top 10 shareholders in the company.
- Previously: Activist Starboard takes stake in Yahoo, calls for AOL merger
Nov. 12, 2014, 3:10 AM
- At least two more top-10 Yahoo (NASDAQ:YHOO) shareholders are pushing for an AOL (NYSE:AOL) merger and have taken their plea directly to AOL CEO Tim Armstrong.
- Armstrong has acknowledged the potential benefits of a merger, but indicated he would only consider a friendly deal, Reuters reports.
- The move follows a campaign by activist investor Starboard Value, which is pushing Yahoo to consider a deal with AOL and unlock its valuable stakes in Asian Web companies.
- Previously: AOL CEO downplays Yahoo talk, predicts ad shakeup
- Previously: Activist Starboard takes stake in Yahoo, calls for AOL merger
Nov. 11, 2014, 4:58 PM
- "BrightRoll is a large, growing and profitable business with net revenues expected to exceed $100 million this year," says Yahoo (NASDAQ:YHOO) as it announces its acquisition of the video ad platform. The deal is expected to close in Q1 2015.
- Yahoo notes BrightRoll's programmatic (automated) ad platform handles ad-buying for 87 AdAge Top 100 U.S. advertisers, as well as all of the top 10 demand-side (advertiser-facing) online ad platforms. Meanwhile, BrightRoll's publisher-facing offerings monetize ad inventory for "tens of thousands" of sites/apps.
- Yahoo, hungry for some time to grow its video ad scale and put an end to its display ad revenue declines, declares acquiring BrightRoll "will dramatically strengthen Yahoo's video advertising platform, making it the largest in the US."
- The acquisition price is lower than the ~$700M previously reported by TechCrunch. Yahoo just reaped $6.3B in post-tax Alibaba IPO proceeds; it has promised to return at least half of the sum to shareholders.
Oct. 21, 2014, 10:28 AM
- BrightRoll, long seen as an IPO candidate, offers video ad buyers a network of 21K+ sites and apps. It both directly sells to advertisers looking to run programmatic (automated) video ad campaigns across the network, and also connects with 3rd-party ad platforms such as Google's DoubleClick, AOL's Adap.tv, and Facebook's LiveRail.
- comScore estimates BrightRoll's network reached 155M U.S. users as of June. The company was reported last year to pulling in over $100M/year in revenue.
- TechCrunch reports hearing Yahoo (YHOO +1.3%) has signed term sheets with BrightRoll, and that a deal (if it closes) is likely to involve a ~$700M-$725M price.
- Yahoo, which just reaped an Alibaba IPO windfall, has been hungry to grow its video ad sales for some time. The company has signed a slew of video content deals and acquired streaming tech developer RayV, and is reportedly thinking of launching a YouTube rival (possibly while leveraging Tumblr)
- Fellow video ad tech provider TubeMogul (TUBE +2.5%) is rallying; its market cap is currently $398M
Sep. 26, 2014, 12:21 PM
- In an open letter, activist investor Starboard Value says it's "a significant shareholder" in Yahoo (YHOO +3.9%), and calls for the company to "explore a strategic combination with AOL (AOL +6.1%)."
- Starboard also wants Yahoo to "[unlock] the substantial value" in its Alibaba and Yahoo Japan stakes in a tax-efficient manner (could be easier said than done), cut losses in its display ad/content ops by $250M-$500M through cost cuts, and put an end to its "aggressive" M&A strategy.
- The firm estimates a $17.67/share "value gap" exists between Yahoo's trading price and its sum-of-the-parts valuation, something it attributes to tax worries and concerns about how Yahoo will spend any Alibaba/Yahoo Japan proceeds (previous).
- It thinks an AOL deal "could offer synergies of up to $1 billion by significantly reducing the cost overlaps in [Yahoo and AOL's] Display advertising businesses as well as synergies in corporate overhead." Starboard also believes an AOL merger could lower Yahoo's Alibaba/Yahoo Japan tax bill.
- Josh Brown argued last week Yahoo is now a prime target for activists. Starboard once waged a failed proxy battle against AOL.
- Yahoo and AOL have both spiked in response to Starboard's letter.
Sep. 18, 2014, 3:12 PM
Sep. 10, 2014, 10:40 PM
- The guessing game has started over which U.S. companies Alibaba (Pending:BABA) might pursue after it becomes flush with IPO cash.
- If Alibaba's borrowing power is factored in, estimates for its total spending capacity range as high as $50B.
- Lion's Gate (NYSE:LGF), Red Hat (NYSE:RHT), and Akamai Technologies (NASDAQ:AKAM) have all been bantered around as potential targets.
- Though a long shot, the case for Yahoo (NASDAQ:YHOO) being in the mix is also intriguing. There's $12B in tax savings generated from Alibaba buying Yahoo - instead of Yahoo selling off its post-IPO stake in the Chinese company and paying the tax bill.
- Alibaba debuts on the NYSE on September 19.
Jul. 23, 2014, 9:40 PM
- After talking with an unnamed "large Yahoo shareholder that is preparing a presentation" featuring a similar thesis, fund manager Eric Jackson thinks there's a good chance Alibaba (Pending:BABA) or SoftBank (OTCPK:SFTBF) will acquire Yahoo (YHOO +3.3%).
- His reasoning: Whereas the value of Yahoo's stakes in Alibaba and Yahoo Japan (OTCPK:YAHOF) are currently discounted for future tax payments, the pre-tax valuations are what matter to Alibaba and SoftBank. The former would be buying back a 22.5% pre-IPO stake in itself, and the latter would be adding to its respective 34.3% and 43% stakes in Alibaba and YJ.
- Jackson estimates Yahoo's assets are worth $56/share to either acquirer - he values the post-IPO Alibaba stake at $33, the YJ stake at $9, and Yahoo's core business at $5, and adds $9 for cash (inc. IPO share sales).
- He speculates Alibaba (were it the buyer) could trade the YJ stake to SoftBank for part of its Alibaba stake (adding to the scope of its buyback), and notes new SoftBank Internet/media chief Nikesh Arora reportedly wanted to buy Yahoo while at Google.
- One caveat: Acquiring Yahoo would give SoftBank a 56.8% stake in Alibaba before factoring IPO dilution. The Chinese government likely wouldn't be pleased with that. Jackson suggests SoftBank could trade part of its Alibaba stake post-acquisition for "something of similar value," but doesn't say what.
- Previous: Alibaba reportedly planning September IPO
Jul. 21, 2014, 5:01 PM
- Yahoo (NASDAQ:YHOO) has confirmed its purchase of mobile analytics platform/ad network owner Flurry, but hasn't disclosed a price. Flurry has also issued a statement.
- Yahoo: "Our combined scale will accelerate revenue growth for thousands of developers and publishers across the mobile ecosystem. Our combined offerings will enable more effective mobile advertising solutions for brands seeking to reach their audiences and gain unique insights across desktop and mobile."
- The company also promises Flurry's offerings (i.e. its data and analytics tools) will help "make Yahoo mobile experiences better through products that are more personalized and more inspiring."
- TechCrunch (citing sources) states the deal's price "could be anywhere between $300 million and $1 billion." One source suggests Flurry was looking for $700M-$800M. Re/code has only reported the price is in the "hundreds of millions."
- 170K developers use Flurry Analytics, but for now, only 8K publishers "monetize" using Flurry's ad solutions, which face competition from Google, Twitter (MoPub), Millennial Media , and many others. The addition of Yahoo's own apps to Flurry's ad network would significantly increase its scale.
- Millennial rallied (MM +2.7%) after reports of the deal broke, as investors hope it, too, will become an M&A target.
- Earlier: Yahoo reportedly buying Flurry
- Update: A source tells the WSJ Yahoo is paying more than $200M.
Jul. 21, 2014, 3:19 PM
- Re/code reports Yahoo (YHOO -0.3%) is acquiring Flurry, a top provider of analytics and ad services for mobile advertisers and publishers. The purchase price is said to be in the "hundreds of millions."
- Flurry claims access to data from 540K apps and 5.5B daily app sessions. Publishers use its analytics services to track user activity and app performance, and to create audience profiles that can improve user acquisition.
- In addition, Flurry has launched a mobile ad network that (with the help of its user data and audience profiles) allows brands/agencies to buy ad inventory provided by developer partners.
- The company was on a $100M net revenue run-rate as of last September. CEO Simon Khalaf suggested an IPO was only a matter of time.
- Acquiring Flurry would provide Yahoo with mountains of mobile app/user data, and bolster its efforts to offset weak PC display ad sales with mobile growth. Marissa Mayer stated last week Yahoo's mobile search and display ad sales both more than doubled in Q2, but didn't give specific numbers.
- Last year, Facebook bought Onavo, another prominent mobile analytics startup.
- Update: Yahoo has confirmed the acquisition, but hasn't given a price.
Jul. 14, 2014, 4:25 PM
- Tim Armstrong would "dearly love" to merge AOL (AOL +2.1%) with Yahoo (YHOO +0.8%), and has (in "sideways ways") brought it up to Marissa Mayer and others, sources tell Kara Swisher.
- However, while many at both companies see value in a deal, given content, video, and ad synergies, Mayer reportedly considers it "small, unexciting, uninspiring and backward-looking."
- Mayer would, however, like to buy the Huffington Post. But Armstrong is said to be uninterested in selling the site by itself.
- The report follows a Sun Valley talk between Mayer and Armstrong that fueled speculation the CEOs were talking about a deal.
- Yahoo's Q2 report arrives tomorrow. The Street is hoping some clarity will be given on Yahoo's plans for its Alibaba IPO windfall.
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