SoftBank and Verizon in race for Yahoo

April 14, 2016 08:00 AM

Japanese operator SoftBank – which owns Sprint – and US operator Verizon are believed to be competing to buy Yahoo, the search company whose revenues are declining steeply. Potential bidders have until April 18 to submit bids.

Verizon bought AOL in a deal valued at $4.4bn in 2015. SoftBank owns most of Yahoo Japan, and pays royalties to Yahoo for the use of the name. Yahoo owns 35.5% of Yahoo Japan, even though Yahoo Japan has used Google for search for some years.

The two executives leading the negotiations are Tim Armstrong, CEO of AOL but a former senior executive in Google, and Nikesh Arora, now COO of SoftBank but also a former senior Google executive – and, even longer ago, a CMO at T-Mobile in Europe.

Yahoo has already issued financial details to potential bidders. US website Re/code has obtained access to this information, which shows Yahoo is rapidly losing business.

Revenues have declined from $4.4bn in 2014 to $4.1bn in 2015 and are expected to be $3.5bn in 2016, writes Kara Swisher of Re/code. Earnings are following a similar path, from $1.4bn in 2014 and expected to be $750m in 2016. Yahoo has $30bn worth of shares in the Alibaba group of China and $8bn worth of Yahoo Japan, notes Swisher.