Mayer or announce Yahoo Revival plan: Invest heavily to acquire start-up companies

The domain.cn October 20 news, according to the Wall Street Journal, said people familiar with the matter, Yahoo (38.45, 0.34, 0.88%) CEO Marissa (Marissa Mayer) is about to refine her plan for Yahoo's recovery, Against the challenge of radical investors starboard value.

When Yahoo announced its third-quarter results in Tuesday, Ms. Mayer was likely to release a cost-reduction plan and disclose details of the company's latest assessment of potential acquisitions, people familiar with the matter said.

Yahoo is considering acquiring one or more large technology start-ups, a move that could create a new source of revenue for Yahoo, a person familiar with the matter said, after profiting $5.8 billion from the IPO (initial public offering) of Alibaba (87.91, 0.94, 1.06%). Over the past 5 quarters, the company has had a 4-quarter revenue slump.

In the quarter ended September 30, excluding commissions paid to partners, analysts expect the company to achieve revenue of $1.05 billion, down 2.8% from a year earlier.

If the acquisition of a rising competitor in the area of content and advertising technology, Ms. Mayer will have more capital to promote marketing staff. Yahoo has a big chunk of its revenue from marketers, but in recent years it has been eroded by Google (511.17,-13.34, 2.54%) and Facebook (75.95, 3.32, 4.57%).

It is not clear whether Mayer will explain the new plan to shareholders. Mark Mahaney, a capital market analyst at Royal Bank of Canada (69.93, 1.22, 1.78%), said that as the CEO has not made much progress in the past two years, investor patience is losing Mahaney. Alibaba's IPO, the original Yahoo shares as an agent of Alibaba investors, will increasingly focus on the company's core values.

"People will now say, ' I've had enough reason to hold the stock. "But now, they need to see Yahoo make a score, ' I can buy Alibaba now, I need some reason to hold Yahoo." Mahaney said. ’”

According to the 38.45 dollar closing price in Friday, investors are now valuing Yahoo at about $38 billion trillion, down about 10% from the 8-year high of September 12, at the eve of Alibaba's IPO. Yahoo's core business is valued at about $4.4 billion trillion, excluding Yahoo's net cash and its remaining Alibaba and Yahoo Japanese shares, and assuming the company must pay taxes to sell the assets.

A sudden increase in Ms. Mayer's pressure came as activist investor Starboard disclosed last month that it had increased its holdings of Yahoo shares and issued an open letter to Ms. Mayer. In the letter, Starboard called for Yahoo to cut costs and consider merging with AOL to divest its core business from Asian assets.

Starboard also called for Yahoo to terminate its merger strategy. The strategy, they say, has cost the company 1.3 billion of dollars, but it has not created value for shareholders. In addition to spending 1.1 billion of dollars in early 2013 to buy the Tumblr platform, Mayer also acquired more than 30 small start-up companies.

People close to the situation said Yahoo and Starboard planned to start their first meeting later this month. The deadline for Yahoo's agency proposal is January 2015.

According to people familiar with the matter, Meyerben may have defended its takeover strategy in Tuesday, calling it a conduit for professionals in mobile applications and other emerging sectors. But the company could cut the number of such deals in the future, focusing on product development rather than recruiting talent.

People close to the situation said Yahoo had recently met with venture capitalists in the hope of assessing possible big deals. The strategic changes also reflect the results of these assessment meetings. Rethers Jacqueline reses, Yahoo's mergers and acquisitions director, said the company was mainly engaged in talent acquisitions.

Rethers the possibility of Yahoo's takeover of AOL at a science and technology conference this July. In an open letter last month, Starboard said the merger of the two Internet pioneer companies could save Yahoo $1 billion in cost and enhance the company's competitiveness.

Yahoo said it would return half of its financing (about $2.9 billion trillion) to shareholders through share buybacks and dividend payments. The company also said it plans to disclose the use of cash to shareholders in third-quarter earnings. Combined with the original $1.55 billion net cash, Yahoo will have 4.4 billion dollars to buy. It is unclear which acquisitions Yahoo has considered.

Although the Yahoo CFO Ken Goldman has said the company will study various tax avoidance options for the remaining Asian assets. However, Yahoo is still unable to discuss tax avoidance plans under the terms of its agreement with Alibaba.

People familiar with the matter said Ms. Mayer could also explain his recent job cuts in India and Jordan of 500 people to compress costs. Yahoo is simplifying the operations of its overseas offices, possibly merging closed offices and laying off workers or transferring staff to California headquarters.