Everyone says Yahoo is in decline, but why are the giants scrambling to acquire it?

There have been many reports recently that Yahoo will sell its Internet business, which is currently valued at much lower than the value of its Alibaba stake.

The attitude of the US tax department has prevented Yahoo from spinning off its Alibaba shares, so Yahoo CEO Marissa Mayer prefers "Plan B", which is to sell Yahoo's core business. Since February, several companies have been considered as possible acquirers, including Microsoft . According to rumors, Google and US telecom giant Verizon have also extended olive branches to this "declined" old Internet company.

The most recently confirmed bidder is the UK's Daily Mail. The newspaper's parent company has confirmed that it is in discussions with an unnamed third party to participate in the acquisition. So what is so special about this declining company that is worth so many giants competing for it?

Does Yahoo still have users?

In many parts of the world, Yahoo may be considered a fading Internet brand. However, in the United States, Yahoo's brand is still recognized.

According to comScore, in February this year, Yahoo was the third most visited online platform in the United States, attracting more than 204 million users. In comparison, Facebook has only 1% more U.S. users than Yahoo. And Google's app-plus-website is only 17% more than Yahoo.

According to a study by Oxford University, one in four people in the United States read Yahoo's news and sports channels at least once a week. There are also reports that Yahoo's personal finance channel is very popular among the "millennial generation", that is, the generation after the "80s" and above. Yahoo's personal finance channel will introduce how to deal with debt problems, while also providing traditional company financial reports.

Other Yahoo assets, such as the microblogging platform Tumblr, the photo-sharing service Flickr, the web-based email service, and the question-and-answer site Yahoo Answers, also have a certain appeal around the world.

With these assets, Yahoo can claim that "more than 1 billion people" regularly use its products.

Why doesn't Yahoo continue to operate?

Investors are losing patience as Yahoo's share of online advertising revenue is out of proportion to its share of users. Last year, Yahoo accounted for just 1.5% of U.S. online marketing spending, compared with 35% for Google and 19% for Facebook, according to market research firm eMarketer.

At the same time, Yahoo's market position is gradually deteriorating. According to documents obtained by the US technology blog Re/code, Yahoo expects its total revenue to fall by about 15% this year.

Why can't Yahoo do better?

A big problem for Yahoo is that, despite showing a lot of ads, its ad targeting capabilities are far inferior to those of its competitors.

"User data is key," said Joseph Evans, an analyst at Enders Analysis. Google and Facebook have huge numbers of registered users, so they can track how users use their services and use that information to help advertisers target ads.

"Yahoo has a huge number of users, but most of them don't log in. Therefore, these users are actually anonymous. Although Yahoo can still use some user behavior data, Facebook and Google know who you are better by comparison."

In this case, what did the Daily Mail see?

Simply put, the opportunity to expand American readership.

Mail Online and DailyMail.com were the only foreign media to rank among the top 10 news websites in the US last year, attracting more than 51 million readers, but Yahoo and its partner ABC will be able to bring more than double that number.

Ian Whittaker, media analyst at investment bank Liberum, said: "The US has become the main driver of growth for Daily Mail & General Trust's (DMGT) digital business. However, despite the growth in traffic, they have not yet tried to monetize the traffic, which may be their expectation."

"The combination of DMGT and Yahoo will provide media buyers with an attractive combination of proven ad impressions in a 'brand-safe' environment."

Another industry observer said the two companies' online activities seemed to match well. Mathew Horsman of consultancy Mediatique said: "Mail Online is fun, even erotic. It caters to young people and is well known for its entertainment and gossip coverage. However, it is also strong in personal finance and real estate. So there is an interesting overlap between the two sites."

Is this deal a done deal?

Far from it. Many people think that Verizon might make more sense to acquire Yahoo.

Verizon is diversifying its business and acquired AOL last year, a deal that gave it The Huffington Post, TechCrunch, Engadget and other well-known news sites.

Verizon then announced that it would combine user information from mobile communications networks with data tracked by AOL websites to provide "more personalized" advertising.

"The combination of Verizon, AOL and Yahoo would create a much larger scale and become a 'third force' in the advertising industry," Evans said. "Verizon already has one of the most sophisticated technology platforms and collects a lot of user identity information on it. So if you combine it with Yahoo's user base, you can provide advertisers with Google and Facebook-level services."

In addition, Yahoo's intellectual property may also attract other buyers.

The New York Post recently reported that Yahoo holds about 6,000 patents worth about $4 billion, and Re/code reported that Mayer was discussing the value of Index, a voice search tool that Yahoo has developed but has not yet released.

Google, Microsoft, Apple and Amazon all have their own virtual assistants, but if Index can really bring innovation, it could still become a target for acquisition by these companies.

As a winner of Toutiao's Qingyun Plan and Baijiahao's Bai+ Plan, the 2019 Baidu Digital Author of the Year, the Baijiahao's Most Popular Author in the Technology Field, the 2019 Sogou Technology and Culture Author, and the 2021 Baijiahao Quarterly Influential Creator, he has won many awards, including the 2013 Sohu Best Industry Media Person, the 2015 China New Media Entrepreneurship Competition Beijing Third Place, the 2015 Guangmang Experience Award, the 2015 China New Media Entrepreneurship Competition Finals Third Place, and the 2018 Baidu Dynamic Annual Powerful Celebrity.