SAN FRANCISCO — Yahoo Inc. chief executive officer Marissa Mayer is exploring strategic alternatives for the company’s beleaguered Web business while slashing staff by about 15 percent and exiting product lines, giving in to demands by restive shareholders displeased by her failure to boost growth.
The Sunnyvale, Calif.-based company will fire employees, shutter more offices, and devote more resources to increasing engagement with users, Yahoo said Tuesday in a statement. Mayer’s plan was unveiled as the company reported fourth-quarter sales and profit that exceeded analysts’ estimates, offering a bright spot to shareholders who have seen the stock drop 35 percent in the past year.
Activist investors such as Starboard Value LP have been calling for leadership changes or an outright sale of Yahoo’s Web units. Late last year, Mayer abandoned a plan to spin off its valuable Asian assets to shareholders, and said she would instead consider a reverse spinoff of other businesses into a standalone company, heightening criticism of her strategy. Though the Web portal on Tuesday said it will continue to pursue that plan, the board will “engage on qualified strategic proposals’’ while exploring other asset sales.
Mayer has been trying to steer the Web portal through one of the most challenging chapters in its more than 20-year history. As newer Internet search and content hubs such as Facebook Inc. and Google have lured advertisers, Yahoo has failed to keep pace, and sales have slipped since reaching a peak in 2008.
“It’s tough to turn around Internet companies,’’ said Shyam Patil, an analyst at Susquehanna International Group LLP. “Either you’re kind of in the sweet spot, or you’re not.’’
Shares of Yahoo slipped 2.6 percent in extended trading. The stock fell 1.7 percent to $29.08 at Tuesday’s close in New York, bringing the decline for the year to 13 percent. In a separate filing, the company said Charles Schwab resigned as a director, reducing the board to seven members.
Several parties have expressed interest in a possible Yahoo transaction. Officials from telecommunications giant Verizon Communications Inc. have publicly said they’d consider a deal. Private-equity firms TPG and Bain Capital Partners LLC are also weighing bids for Yahoo, according to people with knowledge of the matter.
Verizon chief executive Lowell McAdam and chief financial officer Fran Shammo, using similar language, both said in December that Verizon would look at a Yahoo deal “if it made sense.’’ Verizon acquired AOL Inc. for $4.4 billion last year. Yahoo’s mail, finance, sports and video sites attract more than 1 billion users and represent a stable of assets that would add to AOL’s roughly 170 million Web visitors. Such traffic, along with exclusive content, holds appeal for Verizon, which needs to lure and retain a new smartphone-addicted generation.
Despite Verizon’s interest, the two companies haven’t discussed a sale, according to a person with knowledge of the matter.
