$3 billion bid for Yahoo’s core is less than expected

SAN FRANCISCO — Verizon bid $3 billion for Yahoo’s core business in the latest round of offers, according to the Wall Street Journal. The figure is less than what analysts expected the telecom giant might spend, for a smaller slice of Yahoo than they thought it might buy.

The move reflects the growing uncertainty about Yahoo’s future. The Sunnyvale, Calif., tech giant has struggled over the years to turn its business from a desktop Web portal with banner ads to a mobile Internet business that can generate robust revenue. Over nearly four years, CEO Marissa Mayer tried to strengthen the business through acquisitions like mobile analytics firm Flurry and blogging platform Tumblr, but analysts say they have yet to see the return on those investments.

“Right now you’re buying three-quarters of a finished building,” said Venky Ganesan, a managing director at Menlo Ventures. His firm invested in Flurry, which Yahoo bought in 2014.

Analysts had initially predicted that telecom giants like Verizon and AT&T would bid $6 billion to $8 billion for Yahoo, a sum that includes the core business of internet properties and as well as Yahoo’s real estate and intellectual property — chiefly its patents — but not its stake in Yahoo Japan and Chinese e-commerce firm Alibaba. Verizon isn’t interested in the Yahoo real estate or patents, according to the Wall Street Journal, which cited an anonymous source.

Robert Peck, an analyst with SunTrust Robinson Humphrey, called the $3 billion bid “reasonable.” Yahoo’s patents, real estate and Asian assets could be sold off to other buyers, he said.

Not bidding on the intellectual property could make the acquisition simpler because it could take time to evaluate how much each patent is worth, Peck said. Verizon may also plan to concentrate Yahoo employees at AOL’s hub in New York, rather than Sunnyvale, he added. Verizon owns AOL, having acquired it last year in a $4.4 billion deal.

Analysts expect the final round of bids for Yahoo’s core business to happen in July, so a sale could take place in the fall.