Yahoo mulls sale of main businesses, reports say

Yahoo directors have begun to discuss whether to proceed with a plan to dispose of its $30bn stake in Alibaba, find a buyer for Yahoo's core search and display advertising businesses, or both, sources told the Wall Street Journal.

Since her appointment in 2012, chief executive officer Marissa Mayer has struggled to drag the internet giant out of a long period of stagnating growth, though she has brought some stability.

The reports overnight followed last month's request from activist investor Starboard Value that Yahoo abandon the Alibaba sales plan and instead sell its core business.

The hedge fund, which claims to be a major investor in Yahoo, railed against the Alibaba sale after the US tax authorities denied Yahoo's request to confirm the transaction would be tax-free, leaving it open to a potential $12bn tax bill.

Outside of Yahoo’s stakes in Alibaba and Yahoo Japan, some investors have claimed the effective valuations of the company’s core US business as less than zero.

Some analysts suggested the search and display advertising business could reap the group close to $4bn, with analysts at Cowen estimating a value of $3.84bn but those at Pivotal pencilling less than $2bn.

“The saving grace for Yahoo is that it still has a relatively large user base that is reliant on the platform so long as they maintain email addresses there. It also has a still relatively strong (and still relatively large) sales force,” said analysts at Pivotal Research .

“As long as both of those factors remain in place, there would be time for an acquirer to establish new strategies and develop products while the property continues to generate cash flow.”

Since the start of 2015 shares in Yahoo have fallen from $50 to their current level near $34.