Yahoo offered suggestion to buy AOL
Yahoo has recently sold off some of its stake in Alibaba and made a sum of $6 billion and was deliberating on how to inject it into its business. A leading activist hedge fund Starboard Value has made some suggestions as to how to effectively utilize the money with takeover of AOL included in the list.
The hedge fund has sent a letter to Yahoo CEO Marissa Mayer yesterday which urged the chief to make effective investment with the raised money so that it can deliver better returns to the shareholders. As the list of suggestions includes the buying of AOL, Mayer is under more pressure to make an effective plan for the company to travel.
Yahoo was once a big name among the internet users whose glory has dwindled to a lower level now due to the exceptional performance of the other services that entered the field. Although Starboard has not yet revealed how much stake it has in Yahoo, it has said that the company has “significant” stakes in Yahoo which is why it is concerned about how Yahoo will perform henceforth.
The remaining stake Yahoo has in Alibaba is considered as its biggest asset and the company is in a position to determine its next course of action in order to keep up with the growing competition and also enhance its services to continue playing in the field. Out of the all the suggestions that Starboard made in the letter, taking over of AOL is a big eye-catcher as AOL is also in as much trouble as Yahoo.
In the past, bankers and other financial analysts have suggested against the idea of the companies entering a tie-up, however, they also said that their display advertising businesses might pick up speed if such an agreement is worked out.
Starboard has also advised Mayer to consider selling the remaining 15 percent of its stake in Alibaba in tax efficient ways and its 35 percent stake in Yahoo Japan.