Who will buy Yahoo? As suitors such as Verizon and The Daily Mail circle the embattled dotcom pioneer, Andy Moseby, Corporate Partner at technology and digital media law firm, Kemp Little looks at some likely outcomes…
The Daily Mail’s parent company, DMGT, remains in the running to acquire Yahoo!, but will probably need private equity backing if the bid is successful. Recent financial reports have shown that DMGT is £700m in debt with a large pension deficit – so it would need to partner with one or more private equity firms just to access the required cash.
This could make sense for a private equity backer, but would no doubt lead to Yahoo! being split up. Yahoo!’s online news assets (Yahoo! News, Yahoo! Sport) and its reader base may not be seen as particularly valuable to a private equity firm aiming for a speedy return on its money, but could help the Daily Mail secure a foothold as a serious online media group in the US.
If that is the case, I’m intrigued to see where some of Yahoo!’s other “non-core” assets will go (and for what value). Yahoo!’s 15% stake in Alibaba – worth around $34 billion at the time of Alibaba’s IPO, now valued around $25 billion (but still around 75% of Yahoo!’s supposed total market cap) – may well continue to slump as the Chinese economy shrinks.
Micro-blogging social media site Tumblr was written down by $230 million in February, but still maintains around 550 million monthly users. DMGT would no doubt love to be able to use the MailOnline’s advertising strategy across the Tumblr platform, but the Tumblr community has bristled at aggressive marketing in the past. It would also be interesting to see how Tumblr’s young, tech-savvy, liberal user base would welcome a takeover from a company which also owns the notoriously right-leaning Daily Mail newspaper.
By Andy Moseby