The Daily Mail Would Like Someone To Buy Yahoo For It

People at the Daily Mail will do anything for a headline — even the owners. Over the weekend, the Wall Street Journal reported that the British tabloid’s parent company is considering a bid for Yahoo Inc., the troubled internet giant that has been fielding offers for its core business from the likes of Verizon, AT&T, Alibaba, Time Inc. and a number of prominent private equity players.

On Monday, the Mail confirmed that report, saying, in effect, that it is thinking about maybe doing something. “Discussions are at a very early stage,” a paper spokesman said over the weekend.

It’s not hard to see why the Mail, a web content powerhouse that also runs Elite Daily, would want to get access to the sizable number of people that still visit Yahoo’s web properties — which attracted some 204 million people in February 2016, according to comScore.

But it is difficult to see how it could muster a credible bid. Its parent company, DMGT, a publicly traded company in the U.K., is currently valued at $3.3 billion, about a third of the $10 billion Yahoo’s board reportedly hopes to fetch.

Given the difference in size between the two companies, DMGT would have to secure some help from private equity partners to help with the acquiring part. In two scenarios an anonymous source described to the Journal, said partner would acquire Yahoo’s web businesses, which include advertising, search, email and the social network Tumblr, then let DMGT buy Yahoo's media properties, which include Yahoo Finance, Yahoo Sports and a number of digital magazines, or merge those properties with DMGT.

What such a partner would want with those associated businesses is less clear. Yahoo posted a $4.78 billion loss in 2015, the second consecutive year the company has posted a loss in excess of $4 billion, and the immediate outlook for a turnaround is not encouraging. The company expects its revenues to drop more than 10 percent in 2016, before ultimately returning to growth in 2017, thanks to its pivot toward web video.

That pivot came after Yahoo went all in on becoming a digital media powerhouse, taking steps like spending $15 million for the rights to stream an NFL game, and expanding its investments in its digital magazines. Those plans have apparently been abandoned; the company laid off 15 percent of its workforce, with most of the cuts coming from its media outlets.

Last week, Yahoo extended its own deadline for acquisition bids. The date is now next Monday, April 18.