Is Yahoo Putting the For-Sale Sign on Patents?

It’s no secret that Yahoo has struggled a bit lately. First-quarter sales and net income for 2016 were down significantly compared to the same quarter last year, and the company announced a $4.4 billion loss for the 4th quarter of 2015. The announcement included a planned 15% staff reduction along with office closings in Brazil, Italy, Mexico, Spain and the United Arab Emirates. 

As part of its “simplification measures,” Yahoo is exploring the sale of non-core businesses such as patents and real estate. Some estimates place the value of its patents at $3-$4 billion and real estate at $1 billion. Approximately 2,000 of Yahoo’s 6,000 patents may be for sale in the areas of mobile messaging, data mining and behavioral ad targeting. The company has reportedly sold or licensed more than $600 million in patents over the last 3 years. IP Watchdog reported that in October of 2014 Google acquired 55 Yahoo patents in mapping, online search and other digital technologies. 

For all of its challenges, Yahoo is still a force on the technology scene, with 280 million email accounts and 1 billion monthly users. Among the names mentioned as buyers include Verizon Communications and Time Inc., along with several private equity companies. 

Global Search Engine Market Share
Google 71%
Yahoo 10%
Bing 10%
Baidu 8%
Others 1%
Source: Net Applications

During a recent earnings report, Yahoo CEO Marissa Mayer said the company was looking into the “responsible monetization of nonstrategic patents.” Many interpreted the inclusion of “responsible” in her statement as a desire not to let Yahoo intellectual property fall into the hands of patent trolls. Time will tell how the sales process—and Yahoo’s future—will play out. 

Marc Fogarty, Audit Partner and a member of EisnerAmper's Public Companies, Cleantech and International Services Groups. Marc is experienced in public accounting, serving public and private organizations and has presented on IFRS to professional groups.

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