Back in September, when Yahoo was intensifying its efforts to sell assets and refocus its business, there were reports that the company was trying to sell its Yahoo Small Business web hosting unit for between $350 million and $500 million.
Apparently few buyers surfaced, and this week DailyFinance reported that Yahoo has called off the sale effort and will hold onto its hosting business. "We are focused on competing and winning in Yahoo Small Business," Yahoo's Brian Nelson told the news site. "We will always look at parts of the business where divestitures, partnerships or outsourcing could generate incremental value and help us improve our focus. That said, we believe 2010 is about acquisitions and investments to make Yahoo even stronger."
Yahoo Small Business operates one of the largest U.S. shared hosting operations, with about 2.2 million sites, according to recent data. That includes its online store, one of the leading turnkey e-commerce offerings for small businesses. That base of e-commerce customers is a valuable asset at a time when profit margins are being squeezed and pundits see cloud computing emerging as a competitive threat.