Share of Technology Sector inclined 1.42%.
Alibaba Group Holding Ltd. (NYSE:BABA) Unlikely to Buy Yahoo! Inc (NASDAQ:YHOO) Internet Business
Alibaba Group Holding Limited is a Chinese e-commerce company that provides consumer-to-consumer, business-to-consumer and business-to-business sales services via web portals.
It also provides electronic payment services, a shopping search engine and data-centric cloud computing services.
The group began in 1999 when Jack Ma founded the website Alibaba.com, a business-to-business portal to connect Chinese manufacturers with overseas buyers.
Recently, the Wall Street Journal (WSJ) stated Alibaba Group Holding Ltd. (NYSE:BABA) is unlikely to buy Yahoo’s main business.
Yahoo! Inc (NASDAQ:YHOO), is an American multinational technology company headquartered in Sunnyvale, California. The Company is engaged in providing Internet search, communication and digital content.
In its last quarterly earnings, Yahoo missed on both revenue and earnings estimates.
Chinese e-commerce giant Alibaba Group Holding Ltd. (NYSE:BABA) is unlikely to pursue U.S. Internet portal Yahoo Inc.’s flagging core business, according to a person familiar with Alibaba’s thinking, according to WSJ
Purchasing Yahoo! Inc (NASDAQ:YHOO), core Internet business, should it be put up for sale, isn’t attractive given the difficulties successive managers have had in turning it around, the person said Thursday. Alibaba Group Holding Ltd. (NYSE:BABA) isn’t interested in Yahoo’s stake in Yahoo Japan Corp. either, the person said. In addition, Alibaba would only be interested in repurchasing Yahoo’s 15% stake in Alibaba if it came at a steep discount that raised earnings per share, the person said.
The Wall Street Journal earlier stated that Yahoo’s board is holding a series of meetings this week to consider selling off the Internet businesses. Among its options, Yahoo is weighing how to make the most of its stake in Alibaba, presently worth more than $30 billion, and its 35% stake in Yahoo Japan Corp., now worth about $8.5 billion.
The Guardian reported that CEO Marissa Mayer’s plans for a turnaround for Yahoo, while highly anticipated because of her successful 13-year career at Google, have not performed up to the high expectations placed on her shoulders. The investor - one of the most prolific United States activists - typically targets small-and mid-cap public companies it considers undervalued, pushing executives and directors for changes such as unit spinoffs and asset sales. Yahoo is at a disadvantage in recruiting talent because its stock price performance does not reflect the performance of Yahoo employees, but the performance of Alibaba, according to Smith, who pointed out that top talent “wants to be able to directly contribute to, and be rewarded by, its company’s stock price performance”. “The company’s core business is in seemingly permanent decline”.
For Yahoo’s core business, Alibaba has little interest in striking a deal for an operation that has floundered in recent years, the person said. Yahoo has seen a decline in sales of its desktop display advertising and has been eclipsed by younger competitors like Facebook Inc (NASDAQ:FB) and Alphabet Inc (NASDAQ:GOOG). The company’s administration faces investor pressure to consider alternatives to the current turnaround attempt.