Marissa Mayer gives birth to twin girls

For most of the past year, Yahoo had planned instead to spin off the Alibaba stake into a separate holding company called Aabaco. The spinoff is expected to take a year or more to conclude.

Chief executive Marissa Mayer said the new plan would help ensure that Yahoo’s internet business was “accurately valued”.

Peck has been the leading analyst on the Yahoo story.

Chief Executive Marissa Mayer has been struggling since long in order to keep the financially pressured company in shape but faced multiple failures with minimal results. “Yahoo is just a company in trouble”.

The core business – which includes the company’s Internet search component and a range of online advertising and digital media operations – are essentially worthless based on Yahoo’s market value. Verizon said on Monday it could look at buying Yahoo’s core business if it was a strategic fit.

Mayer was back to work soon after she gave birth to her son in 2012, the same year she took over as Yahoo’s CEO. But the Internal Revenue Service jeopardized the plan by refusing to guarantee the Alibaba spinoff would quality for a tax exemption.

“I remain convinced that Yahoo is on a better path and the right one”, Mayer said.

Under mounting shareholder pressure, Yahoo scrapped that spinoff Wednesday and said that it will instead try to break off everything but the Alibaba holdings into another company.

The most likely outcome for Yahoo is a sale, says SunTrust analyst Robert Peck.

As an example, with 600 million mobile users, Yahoo should be generating $3.9 billion in mobile advertising revenue each quarter, said Windsor.

Mayer and Yahoo! chairman Maynard Webb insist that even though the core assets will now be spun-out as an independent entity, there are no plans to seek a buyer. Yahoo’s stock fell $1.19, or 3.4 percent, after the announcement, but recovered somewhat by the close to finish down just 1.3 percent at $34.40.

On the conference call, Mayer said Yahoo’s board believes its core business “remains very undervalued, and we’re focused on unlocking that value”. Multiple options were discussed and considered regarding company selling it’s under pressured Internet business.

As Wall Street’s frustration with the inertia has mounted, Yahoo’s stock has fallen by about 30 percent so far this year. The course Yahoo now plans to pursue would end up transferring the Internet operations into newly formed company.

Yahoo’s current market cap is about $33 billion, but most of that is the Alibaba shares and the company’s part ownership of Yahoo Japan. Another activist shareholder, Jeff Smith of the NY hedge fund Starboard Value, had threatened to lead a mutiny if Yahoo’s board hadn’t backed off from the Alibaba spinoff.