Yahoo Seeks Buyer for Santa Clara Property in ‘Active’ Marketby
Development site bought for $106 million in 2006 for expansion
Sale could be seen as first step to raise needed cash
Yahoo! Inc. is considering selling a development site in Santa Clara, California, punctuating a difficult year for the once-dominant Internet brand.
“With the active real estate market in Silicon Valley and considerable interest having been expressed in the property, we are exploring all of our options including a possible sale,” Yahoo spokeswoman Carolyn Clark said in an e-mail.
The move comes as Yahoo struggles to find a strategy to return the company to growth. Earlier this month Yahoo scrapped plans to spin off its valuable stake in Alibaba Group Holding Ltd., and is now considering bundling the rest of its assets into a separate company. The Internet icon confronts shrinking market share and sales that have been hovering around 2006 levels and has faced pressure from investors to make drastic changes.
Sunnyvale, California-based Yahoo owns about 50 acres in the city of Santa Clara with entitlements to build about 3 million square feet (279,000 square meters) of office space, according to Clark.
Selling the land, which Yahoo bought for $106 million in 2006, could be seen as a good first step to raise cash, though falls short of calls for Yahoo to reduce its workforce and downsize its nearby corporate campus, according to the Silicon Valley Business Journal, which earlier reported plans for the site.
The Santa Clara plot was once viewed as key for future expansion. But as Yahoo’s revenue has dropped steadily from a peak in 2008, Yahoo struck a deal with the San Francisco 49ers to use the area as a parking lot, the Business Journal reported.
“Their core business is in decline so they don’t need to expand, say the way Facebook is expanding to a new campus,” Ivan Feinseth, chief investment officer at Tigress Financial Partners, said in an interview. “It’s one of the many ways they have to refocus and redirect the company. There is somewhat of a panic going on.”
The Business Journal said Yahoo is working with real estate brokerage Jones Lang LaSalle to find a buyer.
Yahoo shares fell 2 percent to $33.37 at the close of trading in New York, bringing the loss for the year to 34 percent.