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Troubled Web portal Yahoo ( YHOO ) would be a good fit for Verizon Communications ( VZ ), bringing the communications giant more heft in advertising technology and mobile video, Macquarie Capital said Tuesday. Verizon reportedly is among those that plan to bid for Yahoo’s Web business and its holdings in Yahoo Japan. Yahoo is looking to sell all or part of its operations, including its core search business and substantial holdings in Alibaba Group ( BABA ) and Yahoo Japan. Yahoo reportedly has set an April 18 deadline for bids. In the meantime, it faces a proxy fight from activist investor Starboard Value, which wants to oust the entire board. “Yahoo’s current turnaround plan focuses on three key platforms (mail, search and Tumblr), four key verticals (news, sports, finance and lifestyle), and two advertiser offerings (Gemini and BrightRoll),” wrote Macquarie analyst Amy Yong in a research report. “Yahoo’s strategy and assets fit well with Verizon’s three-pronged plan, but execution is key,” she said. “If done properly, we believe the companies’ combined assets would allow for more aggressive competition in spaces including: ad-tech and mobile video … as well as content and display advertising.” “Significant” job cuts would result from a Verizon-Yahoo deal, Yong said. Yahoo already is in the process of axing 15% of its workforce, or about 1,600 jobs. Macquarie analyst Ben Schachter estimates that Yahoo’s core business could fetch $3 billion to $5 billion. He estimates 2016 EBITDA (earnings before interest, taxes, depreciation and amortization) of $750 million. Yahoo’s market cap is $34.5 billion. Yahoo Revenue Seen Falling 15% This Year An estimated 40 groups have expressed interest in buying all or part of the financially wilting Sunnyvale, Calif.-based Web portal. News site Re/Code said last week that documents Yahoo provided to potential bidders predict that the Web portal’s 2016 revenue will drop by close to 15% and its earnings by more than 20%. Rumored bidders for Yahoo include the Daily Mail, the British tabloid newspaper which on Monday reportedly confirmed its interest, attracted to Yahoo’s popular news and media properties. The Daily Mail is in preliminary talks with other investors to launch a bid for Yahoo, the Wall Street Journal reported Monday, confirming a previous WSJ report out Sunday. Yahoo stock rose more than 1% on Monday and was up a fraction, near 36.50, in midday trading in the stock market today . Yahoo sent a letter to possible buyers last month, asking them to submit bids. Some buyers might be interested in all or part of Yahoo’s core Web business, while others might want Yahoo’s stakes in China e-commerce Alibaba or Yahoo Japan. Google, the main division of Alphabet ( GOOGL ), reportedly is considering a bid for Yahoo’s core business. Media company Time ( TIME ); Japan’s SoftBank ( SFTBY ), the majority owner of Yahoo Japan; and several private equity firms also are kicking the tires, reports Bloomberg. Yahoo has also held meetings with IAC/InterActiveCorp ( IAC ) and CBS ( CBS ), the WSJ said. One-time potential suitors including AT&T ( T ) and Comcast ( CMCSA ) have decided against bidding, Bloomberg reported. Microsoft ( MSFT ), which failed with a hostile bid for Yahoo in 2008, also won’t bid, according to Bloomberg. Scalper1 News
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