In a letter to Yahoo! (YHOO) employees, Chief Executive Jerry Yang has confirmed the company's board has hired Allen & Company to do a "strategic review to help the Company to a path of robust growth." The letter, first leaked on Friday indicated the company may be considering a review of the company, code word for a sale or merger, which had been reported earlier in the week by Bloomberg News. The stock gained more than 5% after the news broke.
The largest U.S. website by viewers is reeling after its board voted to fire former Chief Executive Carol Bartz earlier this September and replace her with CFO Timothy Morse on an interim basis. The Sunnyvale, California based Company has been in talks with AOL Chief Executive Tim Armstrong about a potential merger. A merged Yahoo! and AOL (AOL) would likely keep Armstrong on as CEO to run the combined company.
In the letter co-signed by Yang, Chairman Roy Bostock and co-founder David Filo the managers wrote to employees that, "You should know that the entire Board and management team are fully aligned and unanimous in their views regarding the scope of this work." The statement appears to be a way to show workers that the board is working in unity, a contrast to Hewlett Packard's (HPQ) board dispute over who and how to run the struggling personal computer maker.The letter stated that "we need to anticipate what [consumers] will want next. That is the path to enhancing the value of Yahoo! for all of its stakeholders, including its users, customers, shareholders, partners and Yahoos everywhere. Our strategic review is designed to help us map out the best way to achieve that." It also mentioned the recent investment of Silver Late and DST Global in Alibaba, an ecommerce company 40% percent owned by Yahoo!. "Alibaba Group has just announced a liquidity event for its employees that reflects a continued appreciation in its value, and therefore of the value of our stake" wrote Yang, Bostock and Filo. Yahoo! has been in conflict with Alibaba and its founder Jack Ma over its stake in the Chinese company. Earlier in the year, Yahoo! management criticized Ma for spinning the company's payments arm, Alipay, without their approval. The split put one of Alibaba's most valuable assets out of the reach of some investors like Yahoo!. All parties settled in July by agreeing that if Alipay were to do an IPO, it would transfer at least $2 billion and as much as $6 billion to the parent Alibaba.
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