Alibaba Is Not Interested In Yahoo’s Core Internet Business

Kathy Savitt, who had been Yahoo’s chief marketing officer, left earlier this year.

Yahoo’s internet business includes services such as Yahoo Mail and its news and sports sites. The board of Yahoo is weighing a sale of its core Internet business when it meets this week amid a broader debate about the future of the company and that of high-profile Mayer. As a result of the option of selling its core business, Yahoo’s stock has spiked more than 7 percent in trading, and more than 300,000 shares changed hands.

A spokesperson for YHOO refused to comment on the report.

The company also acquired the blogging service, Tumblr and invested heavily in mobile and video markets. In October, Yahoo said it would update shareholders with a new strategic plan for the post-Alibaba era during its next earnings call, which is expected next month.

“Realizing value is far from assured”, he said.

The big question is whether anyone would actually show up with a meaningful bid.

Yahoo stock did in fact jump in value by six per cent overnight on Wall Street in a positive reaction to the rumours, as investors favour plans to separate Yahoo and Alibaba without being hit by a punishing capital-gains tax demand. Squali gave each scenario an equal probability of occurring, and said it’s likely that one of them will occur by January.

Yahoo’s desktop search ads continue to decline.

The original decision to split Yahoo’s holding in Alibaba was seen as an attempt to calm restless shareholders, starting with activist fund Starboard, which lobbied for the strategy.

During Mayer’s 13-year tenure at Google, she led the Google Earth, Gmail and Google News teams and is credited with helping create the company’s celebrated search page. How many top-level programmers truly want to work for a company that’s been reduced to a private-equity rehab job?

“Meanwhile, net revenue has fallen from $5.4 billion in 2008 to a projected $4 billion this year, while headcount was at 11,500 in September, down 32 percent from when Mayer was hired in July 2012”.

“To me that would be most valuable to sell”, said Ivan Feinseth, an analyst at Tigress Finanical Partners.

In a letter last month Starboard urged Yahoo to halt plans to sell the $22 billion Alibaba stake due to the risk of a $12 billion tax liability and because the holding along with Yahoo Japan accounts for most of Yahoo’s implied value.