Yahoo! CEO Marissa Mayer remains silent on strategy review

Yahoo! considers its options for the future, but CEO Marissa Mayer gave away no details when announcing the company's Q1 financial results

Yahoo! chief executive Marissa Mayer continues to play her cards very close to her chest, revealing little about the strategic review process underway at the firm.

In February 2016, the beleaguered company announced a strategic review that would include exploring sales options, kicking off a bidding process that had been due to close on 18 April 2016.

Yahoo! is considering bids for its core web business – or pieces of it – and others for its stake in the Alibaba group and Yahoo! Japan.  

So far, Yahoo! has reportedly attracted the interest of the parent company of the UK’s Daily Mail, Verizon Communications, AT&T, Google’s parent body Alphabet, Time and Microsoft – but Verizon is currently the front-runner and is expected to advance to the second round of bidding, according to Reuters.

But Mayer gave no details of how this process was progressing as the company revealed first quarter revenue of $1.09bn, down 11% on the same period the year before, and a quarterly loss of $99.2m compared with $21m in earnings for the first quarter of 2015.

The figures confirm that Yahoo!’s business continues to dwindle, but revenue was greater than analysts had expected, according to the Guardian.

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Investors demand leadership change

Mayer has come under increasing pressure as her attempts to reverse the company’s fortunes in the past three years failed to boost revenues.

Activist investor Starboard Value has been pressing for a sale of Yahoo! assets to revive the company’s revenue growth, and has been calling for a change in company leadership.

"I'm pleased that we delivered Q1 results in line with our expectations. Our 2016 plan is off to a solid start as we continue to focus on driving efficiency, lowering costs, and improving long-term growth," said Mayer.

"In tandem, we made substantial progress towards potential strategic alternatives for Yahoo!. Our board, our management team, and I are completely aligned on this top priority for shareholders."

In an earnings call, Mayer said that despite internal restructuring, significant business changes and “substantial external noise” about the company, Yahoo! employees made “great progress” in the previously announced 2016 plan.

“Our board, our management team and I have made the strategic alternative process a top priority. Our strategic review committee comprises independent directors, well-experienced in strategic transactions. They are leading a well-run process to achieve the best possible outcome for our shareholders. The management team and I have supported the board's process from the start. And we are moving expeditiously,” she said.

Mobile goals neglect advertising

Mayer said Yahoo!’s management team is in daily contact with the strategic review committee and its advisors.

“I personally believe that the right transaction could unlock tremendous value in two ways. One, by realising strategic synergies and accelerating growth in our business. And two, by separating our equity stakes from our operating business, enabling various value accretive subsequent transactions,” she said.

Mayer said that, in the past two months, Yahoo!’s management team has engaged some of the most well-known respected names in the industry.

“We have a well-defined aggressive calendar to move forward at the fastest possible pace,” she said, adding: “To preserve the value and integrity of the process, we do not intend to provide future updates or comments on specific details.”

The first quarter earnings report revealed that mobile advertising revenue was up from $234m to $260m, but desktop revenue was down from $873m to $774m.

Much of Mayer’s efforts have focused on the mobile market, but Yahoo! has been criticised by investors for a decline in revenues from its main advertising-related businesses.

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