Yahoo’s Unexpected Bidder | Summary and Q&A

TL;DR

Verizon and a combination of TPg and YP Holdings are the final bidders for Yahoo, with the conference call likely to focus on the bidding process rather than the earnings report.

Key Insights

• 👨‍💼 The final bidders for Yahoo's core business are Verizon and a combination of TPg and YP Holdings, with YP Holdings being a significant player in the digital ad business.
• 💡 AT&T, a major shareholder in YP Holdings, did not bid independently and possibly collaborated with YP Holdings to counter Verizon.
• 🌥️ Yahoo's secretive bidding process may have deterred larger companies like Google and Microsoft from placing a bid.
• ❓ The conference call is expected to prioritize discussion on the bidding process rather than Yahoo's quarterly earnings.
• 😀 The lack of a winner announcement and the revelation of only finalists in the bidding process is unusual for a consumer-facing company.
• 🫠 YP Holdings, formerly yellowpages.com, has achieved success in the digital ad business, surpassing Yelp in revenue.
• 🉐 The bidding process may potentially result in a bargain for one of the final bidders.

Transcript

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Questions & Answers

Q: Who are the final bidders for Yahoo's core business?

The final bidders are Verizon and a combination of TPg and YP Holdings, with YP Holdings being a significant player in the digital ad business.

Q: Why didn't AT&T bid independently and instead partnered with YP Holdings?

AT&T may have decided not to bid independently to avoid direct competition with Verizon and possibly signed off on the bid with YP Holdings to collaborate against their rival.

Q: Why didn't larger companies like Google, Microsoft, or IAC put in a bid for Yahoo?

Yahoo kept the bidding process secretive, sharing limited information with potential bidders, which discouraged some larger players. This may have included companies like Google, Microsoft, and IAC.

Q: What can the conference call regarding Yahoo's earnings report be expected to focus on?

The conference call is likely to focus more on the bidding process and the potential buyers for Yahoo's core business rather than the quarterly earnings report.

Summary & Key Takeaways

• The bidding process for Yahoo's core business has closed, with Verizon and a combination of TPg and YP Holdings as the final bidders.

• YP Holdings, formerly known as yellowpages.com, is a significant player in the digital ad business, generating about $1 billion in revenue annually.

• AT&T is a major shareholder in YP Holdings, but they did not bid independently, potentially due to their relationship with Verizon.