Yahoo Announces Goodwill Value Of Tumblr
The CEO of Yahoo announced Tumblr $230 million goodwill value.
Yahoo Inc. has been going through a very tough time since late last year and as the time is passes by, it gives more pains to its loyal customers, investors and shareholders. Yahoo was previously tipped to separate its Asian asset, i.e. Alibaba Group Holding, stakes from its core internet business but then shelved the plan. Two weeks ago, the company confirmed that it has officially launched the auction process for the sale of its core internet and advertising business.
The search engine giant started approaching bidders for its auction process. Analysts valued the core business between $6 billion to $8 billion which is a reasonable amount considering the situation it is currently facing. Yahoo’s business has been dead for quite a long time now, which is extending pressure from its activist investors to take action at the earliest. Following the news of its business sale, the Web company delivers another heartache to its shareholders.
It was made clear from the investor Starboard Value that CEO Marissa Mayer is not doing her job right along with her management team. Her role as the CEO has been highly criticized in recent months as she failed to turn around the fate of her firm. On top of it, she was also blamed for her hard line policies.
Before it is all wrapped up, the last thing that CEO wanted was the announcement of the goodwill of its product, Tumblr. Ms. Mayer announced to confirm the value, which Yahoo wrote last month of $230 million of Tumblr. It was an acquisition which cost it nearly $1.1 billion in 2013 and was made under Marissa Mayer’s leadership. Tumblr was a well reputed micro blogging website and during that time many experts believed that the company is overpaying for this deal.
Yahoo illustrate in a recent 10-K filing, “Given the partial impairment recorded in the Tumblr reporting unit in 2015, it is reasonably possible that changes in judgments, assumptions and estimates the Company made in assessing the fair value of goodwill could cause the company to consider some portion or all of the remaining goodwill of the Tumblr reporting unit to become impaired.”
All of this is heartbreaking for the company officials as well as the investors as nothing went Yahoo’s way recently. The deal, which was supposed to play a vital role in changing the game for the search engine giant, failed miserably as well.