In October 2015, Yahoo CEO Marissa Mayer said she planned to “narrow [the company’s] focus on fewer products with higher quality.” We now have a better idea of what the former Google executive had in mind.
Alongside the release of its fourth quarter earnings results (which were released about 20 minutes later than they usually are), Yahoo said Tuesday that it would seek “strategic alternatives” to help save its struggling businesses. Exactly what those alternatives might be weren’t outright detailed by Yahoo, but they’re likely to include a breakup and sale of its internet businesses.
The move is not entirely unexpected—The Wall Street Journal reported on Monday that job cuts were looming—but comes at a delicate time for the company, with revenue flat, new consumer-facing products like video messaging app Yahoo Livetext seemingly going nowhere (it was ranked 613 on the US App Store’s photo apps rankings on Monday), and investors openly calling for the company to be broken up and sold to the highest bidder (Verizon could be just such a bidder).
Compare Yahoo’s fortunes to Alphabet, the parent company of Google (the company Mayer left in 2012 to take over at Yahoo) that’s now the world’s most valuable company on the back of an online advertising business that effectively prints money. The strength of Alphabet’s core advertising business gives it the rare ability to invest in speculative ventures like health research company Calico and self-driving cars without immediately needing those businesses to make money.
Yahoo has no such luxury, with Re/code reporting that Mayer has divided the company into three categories—invest, maintain, and kill—in an effort to figure out exactly where to make the necessary cuts. One thing is clear, however: Yahoo as we know it may not be long for this world.