Yahoo! (YHOO) CEO Carol Bartz is bent on refocusing the business, improving its image and bringing in some cash. Management has taken a number of actions to position the company for achievement of these objectives.
The first was the disposal of non-core assets and acquisition of small-business targets that could help it augment its new business focus. To this end, the company has disposed off its 39% stake in China ’s largest e-commerce company, Alibaba.com, for $150 million.
It has also put up for sale the Yahoo Small Business assets. Rumor has it that the company expects $350-500 million for the business, which has been the main hurdle so far. Renewed talk indicates that the sale could be completed soon. The small business division provides domains, email, Web hosting and other merchant services to customers.
The company has made a couple of acquisitions this year. The first was the U.S.-based company, Xoopit, for $20 million. Xoopit was a start-up company with a technology that facilitates the sharing of content from in-boxes with social-networking sites. Xoopit’s specialization in mail applications, indexing and content discovery is expected to enrich the Yahoo! mail experience.
The acquisition of Dubai-based Maktoob.com, the world’s first free Arabic/English Web-based email service, furthers the company’s growth strategy for emerging markets. The acquisition will allow the company to combine the Yahoo! experience with Arabic language, content, programming and services.
Maktoob has grown into the leading online Arab community with more than 16.5 million unique users across Jordan, Kuwait, Egypt and Saudi Arabia. The World Bank estimates that there are 320 million Arab speakers around the world, so there is significant growth potential. Additionally, online advertising in the region is expected to grow 35-40% this year, according to Madar Research.
In order to build the brand image and re-instate Yahoo! in the minds of consumers, the company is planning to spend around $100 million on a massive advertisement campaign that will play across multiple platforms and nine countries over a period of 15 months. The program, which is being dubbed “Its Y!ou,” will launch in the U.S. on Tuesday, to be followed up in the U.K., India, Brazil, Canada, Hong Kong, Indonesia, Korea and Taiwan. Apart from showcasing several new and enhanced features, the program aims to attract users to its e-mail, instant messaging and software for mobile devices.
Earlier this year, the company also announced a shared search agreement with Microsoft (MSFT), which converts the company’s business to a cash cow. However, regulatory approval of the deal is pending.
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