Recently a shareholder with 1.5 percent of Yahoo Inc., Ivory Investment Management LP, has suggested the company sell its search business to Microsoft, suggesting the business venture has the potential to double the value of Yahoo. Ivory Investment proposed via letter to Yahoo’s board that revising plans to sell the search business to Microsoft.
Microsoft had offered previously to purchase Yahoo at $33 a share, which Yahoo rejected. Yahoo shares were trading less than half that recently. Rumors are circulating on both sides, with some saying Microsoft has no longer has a vested interest in purchasing Yahoo, and some theorizing that a deal of some nature is in the works.
One thing is clear, with 21.4 million shares of Yahoo; Ivory Investments has an interest in the future of Yahoo. The business plan proposed by Ivory Investments suggests that Yahoo retain 80 percent of the advertising revenue generated through its search business, possibly increasing earnings by more than $500 million per year (pre EBITDA). Not to mention that both companies stand to save approximately $800 million simply by combining their search operations, therefore cutting duplicate costs.
What will come of the suggestion made by Ivory Investment remains to be seen. Blue Interactive Agency, your Fort Lauderdale interactive marketing and web design firm will continue to follow the progress of the story.