* Yahoo seeking up to $500 mln for small business unit
* Private equity, corporate buyers could be interested
* Yahoo Hot Jobs, Zimbra also up for sale
(Adds quotes, details on Yahoo strategy, Zimbra sale, shares)
By Alexei Oreskovic and Anupreeta Das
SAN FRANCISCO/NEW YORK, Sept 21 Yahoo Inc
(YHOO.O) hopes to get up to $500 million for a unit that hosts
websites for small companies, after putting it on the market
for several months, two people familiar with the matter said.
Yahoo has received interest from corporate buyers and
private equity firms, one of the sources familiar with the
situation said. It is unclear if any party has made an offer.
But some potential corporate buyers who have looked at the
asset in recent months have decided not to bid because they
think the price is too high, a second source said.
"Yahoo's price expectations are higher than what buyers
were willing to pay," this person said, adding that Yahoo was
seeking $350 million to $500 million. "People would like to own
this asset, but not at the asking price."
As part of its strategy to shed assets that are no longer
core to its brand, Yahoo put the unit called Yahoo Small
Business up for sale about six months ago, along with HotJobs,
its online job classified site, the sources said.
Last week, Yahoo sold its stake in China's top e-commerce
company Alibaba.com for $150 million.
The sources spoke on condition of anonymity because the
sale process has not been made public. A Yahoo spokeswoman said
the company does not comment on rumors or speculation.
The small business division provides domains, email, Web
hosting and other merchant services to customers. Sunnyvale,
California-based Yahoo, which posted $7.2 billion in revenue
last year, does not break out the unit's performance.
STRATEGIC BUYER PREFERRED
Yahoo prefers to sell to another company rather than a
buyout shop, believing that a strategic buyer would be more
likely to pay a higher multiple for the synergies that the unit
has with its own business, the sources said.
The sources suggested that private equity firm General
Atlantic LLC may be a potential buyer for the Yahoo unit
because it owns Network Solutions, a company that provides
similar services to small enterprises. A General Atlantic
spokeswoman declined to comment.
Tricia Salinero, the managing director of Foster City,
California-based M&A advisory firm Newforth Partners, said
there was previously a sense that Yahoo would hold on to the
small business unit if the company could not get its desired
The resurgence of chatter about the deal suggests that
Yahoo may be more confident it can get the price it wants or
that it may now be prepared to sell at a lower price.
"If they decided it was more strategic to divest the unit,
they could lower their expectations," said Salinero.
Under Chief Executive Carol Bartz, who took the reins in
January, Yahoo is in the midst of a turnaround strategy focused
on rebuilding its brand into a more consumer-centric,
That has meant a house-cleaning, with Yahoo evaluating all
assets that are not central to its new strategy.
Earlier this year, Yahoo redesigned its home page, and
Yahoo Chief Technology Officer Ari Balogh told Reuters in May
the company plans to add more social networking features to its
properties through a combination of acquisitions and home-grown
Yahoo is also expected to unveil a new marketing campaign
in New York on Tuesday.
These efforts come more than a year after Yahoo rebuffed
Microsoft Corp's (MSFT.O) $47.5 billion buyout offer, only to
see its share price plummet as it struggled with the severe
advertising market downturn. Yahoo and Microsoft signed a
search advertising partnership this year.
ZIMBRA REPORTED UP FOR SALE
Separately, Kara Swisher of The Wall Street
Journal-affiliated blog All Things Digital reported on Monday
that Yahoo has also put Zimbra up for sale.
Yahoo bought Zimbra, a provider of online email and
calendar software for businesses, in 2007 for about $350
A Yahoo spokeswoman declined to address the report, but
said in an emailed statement that Zimbra is a critical part of
Yahoo's communication tools.
Shares of Yahoo closed Monday's session down 2 percent at
$17.04 on the Nasdaq.
(Editing by Phil Berlowitz, Richard Chang, Gary Hill)