Yahoo ditches plans to spin-off Alibaba stake but will spin-off core businesses
Yahoo will no longer sell its stake in Chinese e-commerce firm Alibaba but will spin-off its core businesses into a new company.
The move follows several days of meetings and the board has today announced that the tech giant's internet business will now be put into a new company to be listed on the stock market instead.
Yahoo subsidiaries such as Yahoo Japan and Yahoo Sport will form the spin-off business alongside the Tumblr blogging network. The move, which is subject to regulatory approval, could take more than a year to complete, the online business said.
Yahoo purchased a 40 per cent stake in Alibaba 10 years ago for $1bn. The current holding value is estimated at $30bn, and the majority of Yahoo's $33bn (£21.8bn) value is attributed to its shareholding in the online retail giant.
Commenting on the new strategy, chief executive Marissa Mayer said it would help ensure that Yahoo's core business was "accurately valued," and that she was "taking further steps to tighten [Yahoo's] focus and prioritise it's investments to drive growth".
If the original Alibaba deal had gone through, Yahoo shareholders may have ended up paying billions of dollars had it been deemed to be taxable – as US authorities denied a request from the tech firm to decide whether the deal would be tax free.
More details about the move will be revealed in January.