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RBC’s Mahaney: The most likely ending to Yahoo proxy fight

Yahoo will likely end up selling its core business once its proxy fight with Starboard Value is finished, RBC Capital Market analyst Mark Mahaney said Thursday.

"I think the probable outcome here is that we have a sale of core Yahoo to a strategic buyer, something like a Verizon. That seems like the most likely outcome, probably happens in the next 12 months. It's kind of hard to imagine the current status quo continuing," he told CNBC's "Squawk on the Street."

Verizon declined to comment.

On Thursday, Starboard nominated nine new members to Yahoo's board of directors. Yahoo responded by saying it will consider the nominations.

"The activists have the facts on their side and the numbers on their side. This year, Yahoo is going to do, per their guidance and per the Street numbers, about $800 million in free cash flow. That's lower than at any point in the last 10 years, and this is in a secular growth industry, so there's something dramatically wrong at Yahoo," Mahaney said.

"I feel sorry for Marissa Mayer, but you can't have an asset that just goes downhill," Bill George, a professor at Harvard Business School, said Thursday.

Mayer took over as Yahoo's CEO in July 2012, and the stock has risen about 120 percent since then. However, shares are down about 20 percent in the last year.

"Investors are clearly frustrated. This thing has gone nowhere for the five, six years. It's a wasting asset and, the longer the board dawdles with getting its strategic act together, the [more] it's going to be worse," George told CNBC's "Squawk Alley."

Nonetheless, Jeffrey Sonnenfeld, senior associate dean at the Yale School of Management, said in the same interview that Mayer has helped develop Yahoo's mobile and video platforms, as well as grow its monthly active users to more than 1 billion.

"This is obviously not reflected in the stock price [because of] the clout over Alibaba," he said. "This board has done a tremendous job in bifurcating the long-term plans with the short-term plans."

Shares of Yahoo were flat-to-lower in afternoon trading.