YAHOO! SHIFTS GEARS

May sell Internet biz

Yahoo! Chief Executive Marissa Mayer is about to give birth to twins, but Wall Street thinks that spinning off the company’s core assets might prove an even tougher task.

Mayer told investors Wednesday Yahoo! has scrapped long held plans to spin off its lucrative piece of Chinese ecommerce giant Alibaba — and will instead consider packaging its collection of Web destinations, email and search service — plus its stake n Yahoo! Japan — into a separate, publicly traded company.

The decision deals a blow to Mayer’s threeyearold effort to turn around the struggling Web portal — that is the No. 3 most popular site on the web but has seen revenue slip during her tenure.

The Street didn’t warm to the latest turnaround plan for Jerry Yang’s 20year old Internet company.

Yahoo! shares on Wednesday dipped 1.3 percent, to $34.40, on the news .

“The new strategy is way more complicated than the old one,” said Nomura media and tech analyst Anthony DiClemente. “There are a lot of requirements in terms of thirdparty approvals. They need consent from SoftBank, business partners like Mozilla and Google and bondholders. It’s going to take a long time — quite possibly until 2017.”

Google is Yahoo!’s search partner while SoftBank is a partner in Yahoo! Japan.

The decision has put Mayer under the microscope, with many observers believing the CEO won’t be sticking around for the long term. She’s set to collect around $150 million if the company is sold.

Mayer made sure to emphasize that she has made good progress since coming aboard in 2012.

For his part, Yahoo! Chairman Maynard Webb made sure to reiterate that the Web portal isn’t currently seeking a sale — just a spinoff — although few believe the move is aimed as the longterm turnaround of the onetime tech poerhouise.

“We believe the best plan is to separate the Alibaba stake and turn around the operating business,” Webb said.

“There’s little hope that the current management team can implement a new strategy in a timely fashion,” DiClemente said.

Yahoo! changed its mind about spinning off its Alibaba stake because of fears shareholders would be hit with a massive tax bill.

The IRS refused to rule such a move would be a taxfree event.

Pivotal Research analyst Brian Wieser sees Yahoo! in a longterm decline with growth coming from acquisitions. He values core Yahoo! at $1.9 billion, not counting his forecast of $5.8 billion in cash on its balance sheet at the end of 2016.

Separately, Internet wunderkind Max Levchin confirmed he stepped off the board months ago. He won’t be replaced.

Levchin also left the board of Yelp to focus on Affirm, a lending startup.