Yahoo changes course on Alibaba spin off plan, sale of core business

Yahoo! Inc. Chief Executive Officer Marissa Mayer gave birth to identical twin daughters early this morning.

“Zack and I are excited to announce that our identical twin girls were born early this morning”, tweeted Mayer on December 10, mentioning her husband Zachary Brogue.

When Mayer announced the pregnancy in September, she was criticized by some because she said she was only “taking limited time away and working throughout”.

Yahoo shelved plans on Wednesday to spin off its stake in Chinese e-commerce giant Alibaba amid pressure from activist investors anxious about billions of dollars in taxes.

With the birth of her son Macallister in 2012, Mayer took a leave of two weeks.

Roger Kay, analyst at Endpoint Technologies Associates, said Yahoo’s internet business still had some value, given its huge global audience and expertise in online advertising.

The new plan will require Yahoo to win the consent of a large cast of players including regulators, shareholders, bondholders, business partners and others “too many to name”, Chief Financial Officer Ken Goldman said on the call. I would bet on tough times for Yahoo in the near future and would not be a buyer until a more clear strategic plan of growth can be put forward.

Asked if the board retains full confidence in Ms Mayer after her three years at the helm, Mr Webb said, “Absolutely…”

But she was later praised for doubling paid maternity leave to 16 weeks across the company and offering eight weeks to fathers.

Yahoo (YHOO) isn’t the only one reversing course today.

In what it describes as a “mirror image” of its original plan to spin off those Alibaba holdings, Yahoo now plans to spin off its core business, along with its 35% of Yahoo Japan, into a… As a result, she now owns them, lowering the value of any potential parting gift if there’s a change in control.

News of Yahoo’s shifting strategy, which CNBC broke last night, initially came as a relief for those anxious that Yahoo faced a huge tax bill, and analysts were enthusiastic.

As Wall Street’s frustration with the inertia has mounted, Yahoo’s stock has fallen by about 30 percent so far this year. “We believe that we are tremendously undervalued and we think the best path to unlocking that value is by separating the Alibaba assets from our operating businesses and also turning around the performance in our operating business”, Webb said during a recent conference call.

“I remain convinced that Yahoo is on the right path”, she said.