Why is Yahoo! selling itself?

Question

As i know it should be such a profitable company. Why does it want to sell itself. is there any financial problem for yahoo. I really dont understand it. can anyone help. And why did microsoft offer to buy it?

Answer 1

microsoft wants a bigger share of the pie. but it offended yahoo by saying their company is cheaper than they're worth.

Answer 2

It doesn't matter how profitable it is.  The Yahoo board of directors has a fiduciary duty to maximize shareholder value, and that means considering all possible options for how to make money for the shareholders. If Microsoft offers an amount that Yahoo's board thinks that Yahoo cannot achieve from its normal operations, it must recommend the merger to its shareholders. If a negotiated agreement cannot be reached, Microsoft can make a tender offer directly to Yahoo shareholders to purchase all of Yahoo's shares at a premium.  So, in that sense all public companies are "for sale," even if management doesn't want it to be.