Yahoo! appears to be shedding assets fast and furiously. Zimbra, for which the company paid a cool $350 million, is reportedly now for sale. And, according to Reuters, Yahoo! is also going to shed its small business unit:
Yahoo Inc hopes to get up to $500 million for a unit that hosts websites for small companies, after putting it on the market for several months, two people familiar with the matter said.
Yahoo has received interest from corporate buyers and private equity firms, one of the sources familiar with the situation said. It is unclear if any party has made an offer.
But some potential corporate buyers who have looked at the asset in recent months have decided not to bid because they think the price is too high, a second source said.
HotJobs is also for sale. The sale rumors surfaced first in July (see my SEL post).
Let’s assume by virtue of its persistence that this report is correct and Yahoo! Small Business is for sale. It would represent a carving out of what was once a very strategic asset:
At one point several years ago, I was told by Rich Riley (then head of Y SMB and now head of Yahoo!’s European operation) that Yahoo! was the biggest SMB webhosting firm in the US. This should have been a gateway into online marketing for SMBs. But Yahoo! failed to create the simplified products necessary to capitalize on the opportunity. Yahoo! Small Business could really have been a jewel within the organization.
As recently as a little over a month ago, on the Yahoo! Q2 earnings call, CEO Carol Bartz discussed the importance of local and SMB advertising. She said that thes segments were increasingly important to Yahoo! and she announced a new deal with AT&T (to sell display ads on Yahoo to SMBs). She added that between AT&T’s yellow pages sales force and the company’s newspaper consortium partners Yahoo effectively had “13,000 sales reps” in local markets around the US.
Here’s the verbatim Bartz quote from the earnings call transcript:
We also know that local relevance of both content and advertising is increasingly important to our users and capturing more of the local ad market is a big focus to us. To this end, we have announced today that we have expanded our relationship with AT&T to include the reselling of Yahoo! display ad inventory by AT&T’s advertising sales force. Grouped with our strategic newspaper consortium partnership we now have a local sales force 13,000 reps strong. These relationships extend our reach into the fast growing local online advertiser segment.
So most of this goes out the window post-sale in all probability. It’s also the case that Yahoo! webhosting could have been extended to the the SMB advertisers of newspaper publishers who are part of the Yahoo! consortium.
In Yahoo!’s still not approved deal with Microsoft, all the self-service paid search business goes through Microsoft adCenter, while the “premium” (read: brands) search business will be handled by Yahoo!
There’s something sad in all of this for me, having seen the opportunity for what seems like a very long time and the organization’s inability to really seize it.