He declined to comment on the company’s potential interest in Yahoo assets.
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The board will discuss whether to stick to its plan to spin off the company’s stake in Alibaba, to find a buyer for Yahoo’s web businesses or both, according to the paper’s reports on Tuesday.
However, even if the spin-off of only the Alibaba shares does go through, it will leave Yahoo in a much weaker position than before and will likely make Marissa Mayer’s job in turning the company around a lot tougher.
Yesterday, Yahoo! Inc.’s (NASDAQ:YHOO) board members convened in one of several consultations planned for this week.
While in its heyday Yahoo’s portal, Yahoo Mail and various sports sites were the centre of the internet universe, others have filled that gap and, despite Mayer’s able stewardship and dedication, the battleship Yahoo just won’t turn fast enough.
Starboard’s demand evidently prodded the board to consider an alternative way to avoid a tax bill that could wipe out more than two-thirds of the gain on Yahoo’s Alibaba stake, which was acquired a decade ago for $1 billion and is now worth $33 billion. Yahoo would not confirm or deny the report. Chief marketing officer Kathy Savitt left earlier this year.
Starboard asked Yahoo in November to drop plans to spin off its stake in Alibaba due to the tax concerns, and urged the company to sell its core search and display advertising businesses instead.
Last month’s letter from Starboard referred to “numerous conversations and meetings” held privately with Yahoo in the past year, and the activists’ growing frustration with the company’s reluctance to adapt its plans as Yahoo’s shares – and those of Alibaba – have declined.
The boardroom intrigue revolves around a recent proposal from Starboard Value, a NY hedge fund that been pressuring Yahoo CEO Marissa Mayer to take dramatic steps to boost the company’s stock. Although Mayer is credited with stabilizing the company, which was in rapid decline, Yahoo has introduced no breakthrough products during her three years at the helm and has fallen further and further behind competitors like Facebook Inc and Google Inc in the battle for advertising dollars.
The prospect of the US Internal Revenue Service taxing the Alibaba deal has also weighed on the stock. The revenues are going to see a growth only after Alibaba matter was resolved.
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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.
