Yahoo's Marissa Mayer Offers Few Sale Updates, Says Bidders Include "Respected" Industry Names

Courtesy of Yahoo!
Marissa Mayer

The deadline for Yahoo bidders was April 18.

Yahoo's first-quarter earnings report on Tuesday is just the appetizer as investors await their main course: more news about the company's potential sale. 

Yahoo brought in $1.09 billion in revenue during the quarter, down 11 percent year-over-year. It reported adjusted earnings of 8 cents per share, down from 15 cents per share last year. On a non-adjusted basis, Yahoo lost $99 million, compared with net earnings of $21 million during the same period last year.  

The beleaguered tech giant, which has been under pressure from activist investor Starboard Value to remove its board, was widely expected to post dismal first-quarter results after Re/Code published a report based on the report that Yahoo's bankers were sending to potential investors. But first-quarter results were actually better than what Wall Street was anticipating. 

Analysts, polled by Thomson Reuters, were expecting Yahoo to report earnings of 7 cents per share and revenue of $1.08 billion.

The Sunnyvale, Calif.-based tech company had set an April 18 deadline for initial bids for its core businesses. While Verizon has expressed interest in the business, Re/Code reports that TPG has also made an offer, as had a group led by Bain Capital and Vista Equity Partners that includes former Yahoo execs Ross Levinsohn, Ken Fuchs and Bill Wise. Levinsohn was formerly CEO of previous THR parent Guggenheim Digital Media. YP Holdings also was said to be considering a bid. 

CEO Marissa Mayer started her conference call with investors by stressing that the potential sale of the business is a "top priority" for her, Yahoo executives and its board. "The management team and I have supported the board's process from the start," she noted, adding that Yahoo leadership participates in daily (and sometimes twice daily) calls with the committee that is leading the sale. 

Mayer also said that she would not give further updates about the sale, while also acknowledging that Yahoo has a "defined, aggressive calendar" to move the process forward at a fast pace. She did note that she and CFO Ken Goldman have spent time in person and on the phone with a number of interested parties that include "some of the most well-known and respected names in the industry." 

When pressed for further comment, she reiterated that Yahoo would would not comment on timing or particular offers "in order to protect the integrity of the process."

Meanwhile, a reverse spin off of the Yahoo core business from its stake in Alibaba is still on the table. Mayer said it's something that the strategic review committee "continues to contemplate" but noted that "obviously the larger volume of work is being done on the process around the possible sale."

In February, Mayer unveiled an aggressive cost-cutting strategy that included reducing the company's headcount by 15 percent and closing offices around the world. The cuts are expected to reduce Yahoo's operating costs by $400 million by the end of the year. She updated investors on the progress, noting that Yahoo has reduced its headcount by 1,200 over the quarter and now employs 9,200 total people. She called the changes "necessary" but "not easy," adding that she remains "confident that our focus on execution will create a better Yahoo." 

Yahoo shares closed down less than 1 percent to $36.33 on Tuesday. Shares were trading up slightly after hours on the Nasdaq.