Yahoo board to discuss sale of core business: Report

Yahoo is not commenting on reports that its board will meet this week to decide whether it should sell its core business instead of its Alibaba stake.
Written by Chris Duckett, Contributor on

Yahoo's board will meet to discuss whether it should sell its core business instead of its Alibaba stake, according to a report by The Wall Street Journal.

Yahoo board members will hold a marathon series of meetings from Wednesday through Friday to hash out whether it would be best to go ahead with a plan to spin off its multibillion-dollar stake in Alibaba or shift gears and sell its core business, WSJ reported.

Yahoo told AFP that it would not comment on the WSJ's report.

A hedge fund with a stake in Yahoo urged the internet giant last month to drop its planned spinoff of its stake in China's Alibaba and instead sell the "core" search business.

The call by hedge fund Starboard Value came with Yahoo on track to set up a new corporate entity holding the Alibaba stake in coming months that would be spun off.

But that spinoff plan has been clouded by concerns that it may not get tax-free status from US authorities, resulting in a hefty tax bill for Yahoo shareholders.

Starboard said in a letter to Yahoo's board and chief executive Marissa Mayer that the spinoff of the entity called Aabaco Holdings "is not Yahoo's best alternative", and argued that "instead, you should be exploring a sale of Yahoo's core search and display advertising businesses".

In 2009, Yahoo signed an exclusive search partnership with Microsoft that saw Yahoo able to use Bing to power its search results, and Yahoo's sales force exclusively sell the Microsoft-Yahoo search and advertising platform. In April, though, the deal was altered to allow Yahoo to use other search providers -- a plan that became reality in October, when Yahoo announced that it would use Google for some search results and advertising.

Yahoo recently took the decision to block access to Yahoo Mail if users were using ad-blockers. Rather than loading the service, users are asked to pause their ad-block software before they can access their inbox.

Up until the end of October, Yahoo went through three chief information security officers in less than six months.

Bob Lord took on the CISO role in October, following the departure of Alex Stamos in June to Facebook, and replacement Ramses Martinez leaving Yahoo to join Apple in August.

In its third-quarter results announced in October, Yahoo reported net income of $76 million on revenue of $1.226 billion.

The company said it would cut back in a number of areas to control costs.

Mayer added that Yahoo would be narrowing its strategy to focus on fewer products in the coming year.

Lack of a long-awaited turnaround at Yahoo has put pressure on Mayer to prove she has what it takes to revive the faded internet pioneer.

With AAP

Editorial standards