Could Yahoo sell its Internet biz to Verizon or AT&T?

The Yahoo board has a series of meetings from Wednesday to Friday in which it is discussing options over how to move forward on its lucrative stake in Chinese e-commerce firm Alibaba Group.

Activist shareholder Starboard Value had written to Yahoo last month urging it to halt its plan to spin off its 15 percent stake in Alibaba and consider selling its core business instead.

The news comes as Yahoo’s board and chief executive Marissa Mayer faces growing pressure over the company’s performance. 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.

The Wall Street Journal first reported that Yahoo might sell its internet business.

If Yahoo decides to sell its core business, it will be left with stakes in Alibaba and Yahoo Japan.

Several potential bidders for Yahoo’s core internet business have emerged, including Verizon/AOL, IAC/Interactive Corp and News Corp.

The board is “seriously considering” pausing on the spinoff until there is more clarity on the tax implications, Re/code reported, citing sources. She has made efforts to reshape the company for the mobile era as more users shift to tablets and smartphones from PCs. In a previous article, Bidness Etc noted that this may not be a good time for Alibaba to buy back Yahoo’s stake in its shares.

Yahoo’s shares were down more than 4 percent in afternoon trading, and Alibaba was down more than 3 percent. “What’s going on now also has echoes of what Twitter just went through – rumors largely generated by those interested in goosing Yahoo’s stock and a willing media ready to help generate froth”, she wrote.

SoftBank is keen to focus more on investments in overseas and Internet ventures and could see value in Yahoo’s assets and expertise.

Much of the value of Yahoo’s $31 billion market capitalization is tied up in two large Asian assets, Alibaba and Yahoo Japan. The source also suggested that the company is also uninterested in acquiring Yahoo’s 35 percent stake in Yahoo Japan, which is valued at around $8.5 billion. In a letter to Yahoo, Starboard said its position changed following the federal government’s decision not to rule on whether the Alibaba spinoff would incur billions of dollars in taxes.

“I have very aggressive expectations for Yahoo’s core business”, she said.