Yahoo mulls $20bn sale to private equity

Steve Dinneen
Follow Steve
Yahoo started life as Jerry and Dave’s Guide to the World Wide Web, a directory of websites named after founders Jerry Yang and David Filo.

In 2008, when Yang recommended shareholders reject Microsoft’s $44.6bn (£28.5bn) bid for the firm, many investors were wishing he had studied the guide a little more closely.

Now sources say Yang is interested in a $20bn deal that would see a private equity group take the reins at the struggling internet giant.

It is understood Yang would retain his 3.63 per cent stake as part of any deal, with Filo also expected to maintain his 5.9 per cent interest.

Silver Lake Partners, Providence Equity Partners, Hellman & Friedman and Bain Capital have all been linked to Yahoo. The speculation comes after reports that Microsoft is also mulling a second attempt at taking control of the company, albeit at a steep discount to the sum it was willing to pay just over three years ago.

Yahoo and its longtime advisers Allen & Co and Goldman Sachs began work on a strategic review after chief executive Carol Bartz was axed last month. The advisers are expected to send financial information to interested parties this week.

Yahoo’s share of the US search market stood at 16 per cent in August, compared with 19 per cent two years ago, despite a deal to outsource search technology to Microsoft. Google’s search share has been steady at 65 per cent, while a resurgent Microsoft has seen its share rise to 15 per cent from nine per cent two years ago.

Since 2008, jokes have circulated that Yang has the best tan in Silicon Valley from all the time he spent on the golf course. He will certainly have his work cut out now.