Yahoo's talks to sell Asian assets unravelBy MICHAEL LIEDTKE, AP Technology Writer – 47 minutes ago
SAN FRANCISCO (AP) — As Yahoo tries to head in a new direction, the fate of the struggling Internet company's Asian holdings remains in limbo.
The negotiations to sell Yahoo's stakes in China's Alibaba Group and Yahoo Japan abruptly broke off in a disagreement over the sales price and the best way to get the complex deal done, according to a person familiar with the matter. The person spoke to The Associated Press on Tuesday on the condition of anonymity because the negotiations are considered to be confidential, despite repeated leaks about the discussions during the past few months.
All Things D, a technology blog affiliated with The Wall Street Journal, reported earlier that the talks had collapsed.
It's the latest twist in the drama that has been swirling around Yahoo Inc. since it fired Carol Bartz as CEO five months ago.
Since the start of the year, Yahoo has hired former PayPal executive Scott Thompson as CEO and announced the departures of five board members, including Chairman Roy Bostock and company co-founder Jerry Yang.
Thompson, Yahoo's fourth full-time CEO in less than five years, has pledged to engineer a turnaround that eluded his predecessors.
For now, though, investors are disillusioned with Yahoo's inability to close the deal on the Asian assets. The company's shares shed 76 cents, or 4.7 percent, to close at $15.36 — below their price six weeks ago when Yahoo announced Thompson's hiring.
The Asian impasse comes as a surprise, given that Yahoo Inc. and the prospective buyers, Alibaba and Yahoo Japan shareholder Softbank Corp., all seemed motivated to seal a long-awaited deal. Yahoo was confident enough to dispatch negotiators to Hong Kong last week while Alibaba had been seeking financing to pay for its part, the person said.
But the sides couldn't agree on the value of Yahoo's holdings, which have been steadily rising in the past few years as Alibaba's electronic-commerce services prospered in China's rapidly growing Internet market. Analysts have also differed on how much Yahoo could fetch by selling its stakes, with estimates ranging from $11 billion to $18 billion.
To compound the challenges, Yahoo had insisted on an arrangement that would enable it to avoid paying taxes. That requirement, according to the person, resulted in a proposal known as a "cash-rich split-off" that would have resulted in Alibaba and Softbank contributing cash and other assets into a special entity in exchange for Yahoo's stakes in the Asian companies. Yahoo then could have used the money generated from the Asian sale to placate its long-frustrated shareholders with a special dividend or other measures that might reverse a three-year slump in its net revenue.
The downturn at Yahoo has occurred even as more Internet advertising has been shifting to the Internet, helping to enrich online search leader Google Inc. and Facebook, the owner of the largest online social network.
Yahoo remains open to reviving the negotiations to sell its Asian assets at the right price, the person familiar with the matter said.
When Yahoo appeared reluctant to sell its Asian stakes late last year, investment firms Blackstone Group and Bain Capital considered teaming up with Alibaba and Softbank in a joint bid to buy Yahoo in its entirety, according to media reports that cited unnamed people. Yahoo also considered selling partial stakes of the company to other investment firms.
Bostock publicly acknowledged the different proposals that Yahoo had been considering last week as he announced he will be stepping down as the company's chairman. At that time, he described the talks with Alibaba and Softbank as active. He also added that "we are not in a position at this time ... to provide assurance that any transaction will be achieved."
Copyright © 2012 The Associated Press. All rights reserved.
Tuesday, February 14, 2012
The Associated Press: Yahoo's talks to sell Asian assets unravel
Former Shell CEO: Get Ready for $5 Gasoline
Gasoline prices are headed for $5 a gallon in many locations in the United States this year, says John Hofmeister, founder of Citizens for Affordable Energy and the former CEO of Shell Oil’s U.S. operations.Global demand will rise and pressure supply, while U.S. politicians aren't doing anything to ease prices at home such as allowing for significantly more drilling.
"What's really unprecedented is developing countries, particularly China and India, have this insatiable need for more oil and that has not been taken into account when we think of public policy in this country," Hofmeister tells CNBC.
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MySpace may have been dumped by media tycoon Rupert Murdoch but today its star investor - aged pop prince-turned-actor Justin Timberlake - has something to smile about: the site has gained 1 million users since December.
The signups represent the first growth for the site since Specific Media bought it.
Murdoch's company News Corp acquired MySpace in 2005 for $580m and then ingloriously offloaded it in June 2011 at a $254m loss. Since being cut loose by one of the world's most famous octogenarians, the website has undergone a major revamp that has included redefining the brand as an entertainment hub mainly use by independent musicians.
And it would seem that the reinvention is slowly starting to pay off. The company said the uptick in signups was largely due to a new music player the one-time social networking giant debuted at the end of the last year. MySpace has also been given a leg-up by Facebook, which it of course once considered to be an arch rival.
The company was bought by Tim and Chris Vanderhook along with Timberlake - famous for chart hit Cry Me a River - for $35m from News Corp, and recently did a deal with Mark Zuckerberg's company and another with Twitter to allow the site to be integrated with the popular social networks.
At its height in 2008, MySpace pulled in roughly 80 million unique visitors each month and when it was sold to Timberlake and co the site's userbase had slumped to 33 million and remained in free fall.
But these days the company is no longer fighting with Facebook and its vast userbase of over 800 million people worldwide. Instead its competing with the likes of Spotify - a company that has already signed its soul away to Zuck's crew.
Comscore noted last week that MySpace's monthly traffic had grown to 25.1 million users in January, up about 4 per cent on the previous month. Before then it had reached an all-time low, so 1 million new signups is apparently worth shouting about.
“The numbers tell an amazing story of strong momentum and dramatic change for MySpace,” the firm's CEO Tim Vanderhook said. “And the one million-plus new user accounts we’ve seen in the last 30 days validates our approach.”
He added: “MySpace is building meaningful social entertainment experience around content, where consumers can share and discover the music they love. Consumers are getting excited about MySpace again - a testament to a great music product.” ®
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Rick Santorum has pulled slightly ahead of Mitt Romney in Republican primary voters' preference for the presidential nomination, a national CBS News/New York Times Poll shows.
Ron Paul is now in third, followed by former Speaker of the House Newt Gingrich.
Rick Santorum: No longer such a long-shot
Just three points over Romney, Santorum's lead in the national survey is within the poll's margin of error, but after wins last week in three states, 30 percent of Republican primary voters now say they support Santorum for the nomination.