Sunday, May 26, 2024

3 Ways Yahoo! Could Make a Major Comeback in 2016

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It was an appalling year for Yahoo! Inc. (YHOO - Get Report) , which has lost one-third of its value in 2015.

In fact, very few analysts seem confident about the stock's ability to mount a recovery. CEO Marissa Mayer is struggling to come up with new and vibrant ideas to make the company relevant again.

Beyond the web of rumors floating around, and talk of splitting the firm (as suggested by some investors), here are three ways Yahoo! could turn it around. On the flip side, these weak and vulnerable stocks are tottering and stand zero chance of recovery.

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1. Reinforced identity

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Despite all that's being said, Yahoo!'s CEO-issues aren't really its principal problem.

There's been a great deal of focus on the pressing need to oust current CEO Mayer (who recently gave birth to twins) and bring in a new order, which could apparently set a change in motion.

The Yahoo! board, we feel, is uncertain at this time about the essentials -- what does Yahoo! represent in a shifting global scenario? What lies ahead for this tech pioneer?

Redefining Yahoo!'s core business model is the key towards initiating a turnaround.

At the moment, this is what comprises Yahoo!'s game-changing plan: "Assets and liabilities other than the Alibaba Group Holding Limited stake are scheduled to be transferred to a newly formed company. Its stock would be distributed pro-rata to shareholders resulting in two separate publicly traded companies."

Now, even if this comes to pass, the big question continues to stay unanswered. We still have little clarity on the core of Yahoo!'s invigorated business model. All we know at this point is that the Alibaba stake is deeply valued and will be kept separate from the strategy.

As per Yahoo!'s plan, its assets, including Tumblr (social media, blogging), Flurry (mobile ads/app analytics), and BrightRoll (video ads) as well as a few others will be poured into one company, while the Alibaba stake will go into another.

Yahoo! investors may not think too highly of Yahoo!'s non-Alibaba assets at this time, but there's a lot of speculation about a number of interested players, including Comcast, News Corp., Time Inc., and Verizon -- that could snap up these Internet assets, or at least a part of them.

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