As Yahoo Ponders Its Fate Endlessly — Selling Off Yahoo Japan Stake Is Suddenly Its Easiest Option
I have called Yahoo the Hamlet of the Internet many times, for its seemingly endless ruminating on what it should do and what it should be.
And that is true on a lot of fronts — from its strategic direction to rejiggering its advertising business to finding solid leadership to whether or not it will sell itself and how to a variety of bidders.
It’s no small irony then that perhaps it’s only easy move right now and the one most likely to happen soon — and which could temporarily assuage its always restless shareholders — is to finally settle a long and arduous effort to sell its Japanese assets.
Sources close to the situation said that the deal — as has been reported — is the closest to a deal compared to any other that Yahoo is contemplating.
Sale or outside investment discussions remain mired, while similar share sale discussions with its Chinese partner, Alibaba Group, remain a constant roundelay of dashed deals.
It has not always been thus recently between Yahoo and Yahoo Japan. Just over a year ago, the company shifted its paid and algorithmic search from Yahoo to Google, raising tensions between the companies.
Now, though, Japan has become the easy one.
In actuality, striking an actual deal is not and has been a task is on that Yahoo has been working on for many years, trying to figure out the best tax-free way to shed its 35 percent stake.
It makes sense, since the asset is no longer a strategic plus it once was.
It also frees up a lot of cash. As of September 30th, according to Yahoo, the pre-tax value of its Yahoo Japan stake was worth $6.4 billion. Presumably, Yahoo would either use the money to bolster its business or, more likely, give its shareholders some kind of dividend.
In such a deal, Yahoo’s longtime Japanese partner — and one of its very first investors — SoftBank would buy out Yahoo’s stake.
That’s the simple way of putting a deal that only an accountant can grok. But one plus is that if Yahoo does pull it off, it would be rid the company of one complication too many.
That said, any Japanese asset sale could also be impossible without a larger settlement of Yahoo’s globally connected issues — or, as I like to call it, the hairball.
And SoftBank, which already owns a lot of Yahoo Japan would certainly need more than just cash — perhaps more of Alibaba than it already owns — to be enticed to buy even more.
Also, for all intents and purpose, SoftBank is the only buyer of Yahoo’s Japan asset, so there’s that issue.
But if it could show some progress in some part of its hopelessly complicated world, for Yahoo, that is always a good thing.