Being the CEO of Yahoo! Inc. (NASDAQ:YHOO) has not been an easy task for Marissa Mayer who is facing a continuous pressure from investors to improve company’s performance. Starboard Value LP is among the latest challengers who are demanding for a merger of Yahoo! Inc. (NASDAQ:YHOO) and AOL, Inc. (NYSE:AOL).
Alternative Investment Management & Research SA, Investment advisory firm in Geneva, wrote a letter to Mayer and Softbank Corp (TYO:9984)’s Chairman, Masayoshi Son, suggesting a merger between Softbank Corp (TYO:9984) and Yahoo! Inc (NASDAQ:YHOO). Analyst from A Needham & Co. raised the rating for Yahoo Inc to Buy stating that the increasing pressure from investors would pressurize the current CEO to accelerate turnaround efforts and use in-hand cash effectively.
The IPO of Alibaba Group Private Ltd (NYSE:BABA) has added to the pressure, as the IPO took out much of the core-business value of the company. Mayer has taken several steps since becoming the CEO in July 2012 but none of them have so far helped the company against growing competition from other online market leaders including Facebook Inc (NASDAQ:FB) and Google Inc (NASDAQ:GOOG).
Albert Saporta, MD of Alternative Investment Management & Research SA, said,
“We think that Yahoo would be far better off under the stewardship and vision of Mr. Son than under Yahoo’s current top management.” Saporta further added, “We would rather have Mr. Son in charge of investing Yahoo’s cash hoard.”
Earlier, Starboard Value LP wrote a letter to Mayer demanding a merger between Yahoo! Inc. (NASDAQ:YHOO) and AOL, Inc. (NYSE:AOL). The firm claimed that continued operations of the new firm would bring down operating costs by $1 billion. Further, the firm advised better tax saving plans for Yahoo Inc.
This article has been written by Prakash Pandey.