Yahoo’s core business may seem unloved these days (by some standards it's worth less than zero), but that hasn’t stopped a wide range of companies from trying to get their hands on it. Britain’s Daily Mail and General Trust, owner of an eponymous newspaper and website among other properties, is the latest to show interest in the floundering Web giant. Yahoo has set a deadline of April 18 for potential suitors to make a bid for the company, and here's what may attract some buyers:
Pushing back against the notion that Yahoo's core business is worthless, Bloomberg Intelligence analyst Jitendra Waral values that franchise -- which consists of advertising, search, and its very popular content sites, including Yahoo Finance and Yahoo Sports -- at $5.34 billion, assuming a 1.5 multiple of revenue (the same revenue multiple that surfaced in Verizon's purchase of AOL last year).
For a glimpse of the world Yahoo inhabits, here's how the biggest digital media properties in the U.S. stack up:
The Daily Mail hopes to boost its U.S. online presence with Yahoo’s heavily trafficked media and news sites. It would have to partner with a private-equity firm to complete the deal.
SoftBank owns a 43 percent stake in Yahoo Japan and a majority stake in Sprint. It might buy Yahoo’s 35.5 percent stake in Yahoo Japan simply to keep it out of Verizon’s hands. SoftBank currently pays $240 million in annual fees to Yahoo, a deal it would like to end.
Verizon’s bid has been the most overt and may be the most likely to rule the day. Buying Yahoo would allow Verizon to continue ramping up its data collection, advertising and mobile content businesses (the logic for its AOL takeover last year) -- just as long as the Federal Communications Commission doesn’t think Internet companies know too much about us and decides to put a wrench in Verizon’s plans.
This column does not necessarily reflect the opinion of Bloomberg LP and its owners.
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