(WEB HOST INDUSTRY REVIEW) — After putting it on the market for several months, web search provider Yahoo! (www.yahoo.com) has put a price sticker as high as $500 million on its business unit that hosts websites for small companies, two unnamed sources told Reuters.
Seeking $350 million to $500 million for Yahoo Small Business (smallbusiness.yahoo.com), Yahoo received interest from corporate buyers and private equity firms, however, it is unclear if any party has made an offer, one of the sources said according to the Reuters report. A second source said that these potential buyers have been reluctant to bid because the valuation is too high.
The sale of its web hosting assets is likely part of Yahoo’s effort to free itself of assets no longer core to its brand. Reuters reported that it put Yahoo Small Business up for sale about six months ago, along with online job classified site HotJobs, and Zimbra, an open source email and calendar groupware application. Yahoo sold its stake in China’s top e-commerce company Alibaba.com last week for $150 million.
These sales could be thought as a part of Yahoo’s recovery strategy following a $47 billion acquisition negotiation failure with Microsoft last year, which saw its market value fall by more than $20 billion. Added to Yahoo!’s troubles were a failed partnership with AOL (www.aol.com) and an advertising revenue-sharing deal with Google (www.google.com), which dissolved in late 2008, which factored into co-founder Jerry Yang’s decision to resign as CEO in favor of experienced technology executive Carol Bartz.
In a Data Center Knowledge post, Rich Miller wrote that insiders or investment bankers may be hoping Yahoo will rethink its valuation, “[b]ut the changes in the wind at Yahoo, along with Bartz no-nonsense reputation, suggest that Yahoo might be a motivated seller.”
Elsewhere, the Yahoo has been trying to wrest search engine market share from Google. Late last month, in order to snare a regional online advertising market that may increase as much as 40 percent this year, Yahoo signed a definitive agreement to acquire Arabic-language Internet portal Maktoob.com (www.maktoob.com) to extend its search capabilities to the Arabic world.
In July, Yahoo and Microsoft (www.microsoft.com) entered into a web search partnership agreement in which Microsoft will power Yahoo search and Yahoo will handle worldwide sales for both companies’ premium search advertisers.
