The board is under pressure to consider Mayer’s future and other alternatives to her plans. Back then, Yahoo invested $1 billion in Alibaba, and also handed the company the keys to Yahoo China. However, if Yahoo sells out their investments, it has to pay large amount of taxes.
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The executive board at Yahoo is now exploring a range of options on how to best manage a number of their Internet businesses, including the sale of web properties, with talks set to take place Wednesday through Friday, unnamed sources told The Wall Street Journal.
However, Re/code’s Kara Swisher countered yesterday that the board meetings are nothing more than Yahoo’s “typical multi-day annual board meeting “always held in December”.
Yahoo has declined to comment or report on the meetings.
According to a person familiar with the matter, activist investor Starboard Value LP is also disappointed in Yahoo’s performance under Mayer and has lost confidence in the CEO.
CEO Marissa Mayer had planned to complete the spinoff by January and promised to update investors on her strategy for the rest of the ailing web portal.
The prospect of the US Internal Revenue Service taxing the Alibaba deal has also weighed on the stock.
Most of the company’s value is tied to its stake in Chinese e-commerce giant Alibaba. If Yahoo’s board sticks to the Alibaba spinoff, Starboard is threatening to lead an attempt to oust the nine directors next year.
Yahoo’s Internet business has been struggling to boost revenue from ad sales in the face of stiff competition from Alphabet Inc’s (GOOGL.O) Google and Facebook Inc (FB.O).
“I have very aggressive expectations for Yahoo’s core business”, Ms Mayer said on the call.
Currently Yahoo Inc. business portfolio consists of Yahoo Finance, Yahoo Mails and Yahoo Sports.
Yet, for years now, Yahoo has desperately sought a reason for existing. Private equity firms and telecommunications companies such as Verizon have been cited as among the potential buyers of Yahoo’s core business in recent media reports and analyst notes.
A separate Alibaba stake would be expected to be more highly valued by the market, but investors want to avoid a massive tax bill in the process. Others might be interested in pieces of Yahoo, if they become available, including News Corp, owner of The Wall Street Journal, and magazine publisher Time Inc., according to executives familiar with the situation.
Yahoo shares closed up 5.8 percent at $35.65 on Nasdaq. The company had sought a private letter ruling from the IRS to confirm if the transaction would result in a tax obligation, but the IRS denied the request in September.
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