|Yahoo’s value has fallen sharply, making it a possible takeover target by AOL Inc. (Paul Sakuma/Associated Press)|
Deal talk turns up pressure at Yahoo
SAN FRANCISCO — With buyout vultures circling the Internet company, Yahoo Inc.’s chief executive, Carol Bartz, may have to accelerate her timetable for engineering a turnaround if she wants to save her job.
Bartz has said it could take a couple more years to revive Yahoo after a long period of listlessness, but it appears the company could become a takeover target if its financial performance does not improve within the next few months.
That urgency was underscored late Wednesday as The Wall Street Journal reported that another falling Internet icon, AOL Inc., is in preliminary discussions with a group of leveraged buyout firms, including Silver Lake Partners and Blackstone Group LP, about making a joint bid for Yahoo because its stock has been slumping for so long.
The Journal story cited unnamed people familiar with the talks and said two or three other firms could also be interested in a deal, which could bring AOL’s chief executive, Tim Armstrong, to Yahoo.
It is likely a suitor would emerge if Yahoo’s revenue keeps growing at a turtle’s pace while rivals such as Google Inc. and Facebook sprint ahead.
Yahoo hired Bartz, a Silicon Valley veteran, in January 2009, convinced she would prove the company is worth more than the $47.5 billion Microsoft Corp. was offering for it, a bid Yahoo snubbed in 2008.
Microsoft has since forged an Internet search partnership with Yahoo. Bartz has won praise for negotiating the alliance and cutting costs, but Yahoo’s revenue in the first half of the year edged up less than 2 percent. Google’s rose 23 percent. That has left Yahoo’s stock far below Microsoft’s final offer of $33 per share.
AOL’s market value is just $2.7 billion, 13 percent of Yahoo’s. That means AOL would need plenty of help to buy Yahoo.