Yahoo Board, Sticking by Mayer, to Decide on Spinoff by End of Weekend
According to a boatload of sources close to the situation, Yahoo’s board wrapped up its regular December meeting yesterday without a final decision as to whether it will move forward with its planned spinoff of its huge stake in China’s Alibaba Group.
It’s not clear if the directors will halt the transaction, pause it or simply continue with it, but sources said the decision will be made by the end of the weekend.
Yahoo has already selected a CEO and a board for the new entity, called Aabaco Holdings. It is essentially ready to be spun off, said numerous sources, if and when the company decides to proceed.
Today, sub-groups of the board have been mulling tax and other legal implications of the transaction, which has recently come under fire from activist shareholder Starboard Value. At first, Starboard had pressed for it to happen, but did a 180-degree shift after the Internal Revenue Service declined to provide a ruling that the deal would be tax-free.
Instead, Starboard is now pushing for Yahoo to dump the spinoff and then sell off the core Internet assets of the company. It and others — mainly the noisy media — have been suggesting that CEO Marissa Mayer is not the leader the company needs going forward.
That’s certainly debatable, but the board of Yahoo appears to be sticking by her at the meetings this week, according to sources, even though directors have voiced concerns about her leadership.
But that is not the same thing as firing the high-profile former Google exec, who could also make a case that she has improved Yahoo. She certainly has correctly pivoted the company toward mobile and could easily make the point that fixing Yahoo is no easy task.
“It’s not like she took a great company and made it crappy,” said one smart observer who has deep knowledge of Yahoo. “She took a crappy company and made it a little less crappy in some ways and a little more crappy in others.”
Truth! After more than three years and a lot of activity, Yahoo’s turnaround has not turned, Mayer’s strategies seem ever-changing and there is a severe problem with talent exodus. Still, the situation at Yahoo is not as dire as activists are trying to paint it, even though the upcoming quarter is going to be just as lackluster, said sources.