Business

Marissa Mayer’s spending spree has no end in sight

Is Yahoo! planning to spend big — or cut big?

CEO Marissa Mayer — already under fire for spending more than $7 billion on acquisitions that have yet to pay off over the last three years — intends to shell out another $3 billion to bolster the struggling Web giant’s content arsenal, say sources close to the company.

The additional spending, if undertaken, could further upset shareholders who have grown increasingly irritated as the company’s lack of growth.

Yahoo! declined to comment on Mayer’s spending or acquisition plans, saying she would reveal her intentions soon — perhaps when the new mom returns to the Sunnyvale, Calif., company after maternity leave.

Under shareholder pressure, it is unclear whether Mayer has axed her spending plan — or intends to double down to get the growth she has promised shareholders if given time to complete a spinoff of the core business from its other holdings in Alibaba and Yahoo! Japan.

Martha Nelson, who came from Time Inc. and is directly responsible for content, would rather scythe down the huge number of content channels and focus on the ones which do best, sources said.

The content channels, referred to at Yahoo! as magazines, include: politics, celebrity, movies, music, TV, health, style, beauty, food, parenting, makers, tech, travel, autos and real estate.

Meanwhile, under threat of a proxy battle from starboard Value, an activist shareholder, Yahoo! is reportedly reconsidering its plan to spin off its main Internet business, according to a report on Friday.

Instead, the Web portal is weighing an outright sale of its business, Bloomberg reported. Some vocal shareholders think Yahoo! management would do better to sell as soon as possible.

The sale of the entire business would be a stark change of heart for Mayer and mark a victory for the activist shareholders.

Yahoo! still hasn’t concluded that it has to sell and hasn’t hired a bank to run an official process or contacted potential buyers, sources said.

Separately, Simon Khalaf, Mayer’s content chief, tried unsuccessfully to woo personal finance guru Suze Orman to the Yahoo! site in recent months, sources said.

Yahoo! shares closed Friday at $30.63, up 1.6 percent in the wake of the Bloomberg report that the company may decide to put itself on the block.

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