Purple prose

Yahoo keeping all of its bad options open

Yahoo Chief Executive Marissa Mayer is keeping all of her bad options open. The floundering internet firm topped a whopping $4.5-billion writedown in the fourth quarter with plans to pursue "strategic proposals" for its core search and advertising operations. The company also said it would cut 15 per cent of its workforce, jettison products like some digital magazines and maybe spin off the core assets from its stake in Chinese e-commerce giant Alibaba. Selling those assets is still the best of a bunch of lousy choices.

It's fitting that Yahoo released the news on Groundhog Day, the annual US occasion for seeing whether an enormous rodent will predict a long winter. A movie with that title employs the plot device of actor Bill Murray reliving the same day in a never-ending loop.

That pretty much sums up Yahoo's recent history. Nearly a decade since rebuffing Microsoft's almost $45-billion offer, the company has been caught in a cycle of hope and decline. Despite high expectations, Mayer hasn't been able to turn things around since she took the reins in 2012. The company's revenue did grow almost eight per cent in 2015, to about $5 billion. Yet Yahoo also took the massive goodwill writedown in the fourth quarter, including for the value of Tumblr, which it bought in 2013 for $1.1 billion.

Mayer is now emphasising the so-called Mavens - her catch-all phrase for the mobile, video, social and native advertising businesses. Revenue from those operations increased 45 per cent to $1.6 billion last year, and the boss hopes to increase that figure to $1.8 billion in 2016.

While that would be sizeable growth, it's also a reminder of how far the company has fallen behind Facebook. Mobile-advertising revenue at the social media giant rose 81 per cent year-over-year in the fourth quarter of 2015, accounting for most of the company's $5.6 billion in total ad sales.

Yahoo's board may want to focus on auctioning off its core business rather than pursuing multiple paths at once. Potential buyers like Verizon, private-equity firms and even media mogul Barry Diller are lurking, and Yahoo probably can't afford to struggle through another long winter.