Yahoo Spinning off Core Business including Tumblr, Search

Yahoo hasn't been a major company for quite a while now. Although in recent years, they've tried to become a large company again with buying Flickr and Tumblr and releasing all new Android apps as well. Recently, there were rumors and reports that Yahoo would spin off their Alibaba stake which is worth about $30 billion. But today, according to a press release, that appears to not be the case. And the major reason is due to the huge tax bill Yahoo would be stuck with if they spun off the Alibaba stake. So instead, they are spinning off the core business.

The spinoff would include their advertising, search technology, Yahoo Sports as well as Tumblr. "With a large portion of our market capitalization driven by our Alibaba stake, a separation will provide greater transparency to ensure that Yahoo's business operations are accurately valued, especially as we continue to improve Yahoo's products and operations," stated Marissa Mayer, CEO of Yahoo. Now before this can be set in stone, Yahoo will need to get approval from their shareholders, and the deal could take over a year to complete. The move was met with approval by analysts at Wall Street. Scott Kessler, who is an equity analyst with S&P Capital IQ, noted in a research note to clients, "we think this is a reasonable decision, given the considerable tax-related uncertainties around the Alibaba stake spin-off". Kessler also reiterated a "Buy" option for Yahoo stock.

This comes just a day after Verizon's CEO, Lowell McAdam, had stated that the company wasn't in talks with Yahoo and wasn't aware it was up for sale. However, McAdam did state that the company would look at what Yahoo has to offer, and if it's what they are looking for, they may make an offer. Yahoo's properties would definitely compliment the properties they got from AOL when they purchased that company earlier this year for $4.4 billion. With Yahoo's search up for sale in this spin off, it's going to be interesting to see what happens with the contracts they have with Google and Microsoft's search businesses. Google's deal is a 10-year deal and was just signed earlier this year.

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Alexander Maxham

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Alex has written for Androidheadlines since 2012 as Editor of the site and traveled the World to many of the biggest Smartphone and Technology events. Alex has a background in Technology and IT and Deep Passion for Everything Android and Google. His specialties lay in Smartphones of all budgets, Accessories, Home Automation and more. Contact him at [email protected]