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Yahoo To Spin Off Everything That Makes It Yahoo (nytimes.com)
An anonymous reader writes: Yahoo has confirmed reports from last week by saying it plans to spin off all of its assets aside from its $31 billion stake in Chinese e-commerce company Alibaba. "In the reverse spin off, Yahoo's assets and liabilities other than the Alibaba stake would be transferred to a newly formed company, the stock of which would be distributed pro rata to Yahoo shareholders resulting in two separate publicly-traded companies." Their decision was spurred by how stock market traders were weighing the tax risk of spinning off the most valuable part of the company.
The article notes that this probably means trouble for CEO Marissa Mayer: "Ms. Mayer, who was hired in 2012 to turn around Yahoo, had planned to spin off the company's 15 percent stake in Alibaba, bundled with a small-business services unit, into a new company called Aabaco. She then planned to focus on improving the company's core business, the sale of advertising that is shown to the roughly one billion users of Yahoo's apps and websites. Ms. Mayer is now effectively back to square one. Yahoo's core Internet operations are struggling, even though the chief executive has made dozens of acquisitions, added original video and magazine-style content, and released new apps."
The article notes that this probably means trouble for CEO Marissa Mayer: "Ms. Mayer, who was hired in 2012 to turn around Yahoo, had planned to spin off the company's 15 percent stake in Alibaba, bundled with a small-business services unit, into a new company called Aabaco. She then planned to focus on improving the company's core business, the sale of advertising that is shown to the roughly one billion users of Yahoo's apps and websites. Ms. Mayer is now effectively back to square one. Yahoo's core Internet operations are struggling, even though the chief executive has made dozens of acquisitions, added original video and magazine-style content, and released new apps."
You have two companies, Alibaba (Chinese) and Yahoo (US). Yahoo takes over Alibaba to make one company (US). Yahoo disinvests everything into a different company, call it exactly-what-yahoo-was-before.com (US) and is now a new US company, called Yahoo but being exactly what Alibaba was before.
It's not necessarily even a SNAFU. The non-paranoid view would be: Yahoo! was a mess and most in the industry viewed it as impossible to turn around. Ambitious Google executive - who wasn't going to be getting the top spot at her current employer anytime soon - decided to take the challenge. Three years later it turns out everyone was right, it was an impossible task.
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