A live webcast of the conference call can be accessed through the company’s Investor Relations website at https://investor.yahoo.net/events.cfm. And the focus no longer is on liberation, but on the possibility of selling off the core business. The company just announced plans to spin off its core business, and some have questioned Mayer’s leadership.
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The reasons for the change are technical and involve tax planning. The board expects that it will take a year or more for this spinoff to conclude.
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.
Analysts described the move as the same thing, with a different wrapper.
This is the second time that the 40-year-old Mayer has given birth since Yahoo hired her as CEO in July 2012.
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.
The plan to spin off the Alibaba stake hit a hurdle in September when United States tax authorities denied a request from Yahoo to decide whether the deal would be tax-free.
A luminous bright spot for Yahoo: its 15 per cent stake in Chinese e-tailing giant Alibaba.
Yahoo had hoped that its spinoff would be treated as tax-free but U.S. authorities said they could not guarantee this in advance. Its remaining Alibaba shares almost match Yahoo’s current market cap of US$32.3 billion. “Our goal remains the same as it ever was, to separate our Alibaba stake from our business to realise benefits for our shareholders”. In the same pattern, she said her priorities are “God, family, and Yahoo, except I’m not that religious, so it’s really family and Yahoo”. To help unlock the value of the underlying business – the Internet portal – Yahoo is considering a plan to spin-off its core business.
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. He says either a strategic buyer like Verizon, or a private equity firm is likely to step in and buy Yahoo, as opposed to Yahoo spending the rest of the year trying to figure out how to spin out its internet business. Judging by the results of its previous efforts, investors may not be too keen on that approach.
Yahoo (YHOO) isn’t the only one reversing course today.
And Mark May, the analyst at Citigroup, downgraded Yahoo this morning to a Neutral from a Buy.
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As Wall Street’s frustration with the inertia has mounted, Yahoo’s stock has fallen by about 30 percent so far this year. By creating highly personalized experiences for our users, we keep people connected to what matters most to them, across devices and around the world.
