Yahoo’s board is still debating the Alibaba spinoff

The Journal, which first reported that Yahoo might sell its Internet business, also reported on Tuesday that the board meeting would discuss how to proceed with the spinoff of the company’s 15 percent stake in Alibaba, worth more than $30 billion if held separately.

Cowen & Co analysts estimated that Yahoo’s core search and display advertising business was worth $3.84bn, while Pivotal Research Group valued it at just $1.9bn. Yahoo has declined to comment on these reports at this time. No matter what options are considered, any decisions regarding the company are likely to put attention squarely on Marissa Mayer and the board, now preparing to decide the fate of one of the oldest and largest names in internet companies and one of the original pioneers of the internet age. Mayer has also lost some important executives who were part of the Alibaba share sale deal including chief development officer Jacqueline Reses, media strategist Rob Barrett and chief marketing officer Kathy Savitt, this year. Once being the most powerful sites on the Web, Yahoo has been beaten in search and email by Google and overtaken in media by Netflix and Amazon.

Shares of Yahoo rose $1.93, or 5.7 percent, to $35.64 in morning trading Wednesday. Yahoo shares have declined 33% this year.

If things continue to deteriorate at Yahoo and more shareholders clamor for a new CEO, it doesn’t take much imagination to envision Mayer deciding to step down to spend more time with her children at some point next year.

Veteran tech analyst Richard Holway of TechMarketView, said: “A sale of the core internet business would be a great shame when you consider Yahoo was the heart of the red-hot internet boom in the 1990s”.

This proposal, Starboard said, would leave the existing Yahoo corporate entity holding stakes in Alibaba and Yahoo Japan. This was true because Yahoo offered (and still offers) relatively good targeting and efficiently aggregated audiences.

Under Ms. Mayer, Yahoo has made investments in online video, advertising technology and mobile software that have failed to create meaningful traction for the company. 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.

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.

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