Yahoo also announces £365m write-down of Tumblr
Yahoo has failed to update investors on the sale of its core internet business as it revealed it suffered a £332 million loss in its second quarter.
Instead, CEO Marissa Mayer said that “progress” has been made on its strategic alternatives but failed to define what that subjective term meant.
Yahoo saw a rise in revenue to $1.3 billion (£1bn) in the second quarter, with mobile revenue growing from £252 million to $378 million (£287m).
“With the lowest cost structure and headcount in a decade, we continue to make solid progress against our 2016 plan. Through disciplined expense management and focused execution, we delivered Q2 results that met guidance across the board and in some areas exceeded it,” said Mayer.
“In addition to our efforts to improve the operating business, our board has made great progress on strategic alternatives. We are relentlessly focused on delivering shareholder value.”
But perhaps the biggest loss for Yahoo came with the disappointment of Tumblr. Yahoo has had to suffer a $482 million (£365m) write-down of the blogging site this quarter, as it sees the website as no longer profitable. Tumblr was bought by Yahoo just three years ago for $1.1 billion.
Yahoo’s search revenues also tumbled 13 percent year over year, only adding certainty the sale of its core internet business.
A buyer for the business could be announced as early as this month, with price estimates ranging from $5 billion (£3.8bn) to $8 billion (£5bn).
While Mayer originally planned to spin off Yahoo’s stake in Chinese firm Alibaba, that idea was binned to make room for the internet sell off.
In June, sources reported that there are multiple bidders vying for Yahoo’s core Internet business at or above the value of $5 billion.
In May, Verizon was reported to be one of the shortlisted bidders among nine others who are after Yahoo’s Internet business as the company led by Marissa Mayer looks to sell off its core assets.
The shortlisted companies, a list that also includes equity capital firm TPG Capital, are mostly large organisations looking to carry out the transaction on their own, rather than the smaller companies that had proposed alliances with other firms to fund a deal, according to a Reuters report citing unnamed sources in May. Verizon’s bid had fallen short of Yahoo’s $5 billion target, coming in at $3.5 billion