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Yahoo to spin off Alibaba stake into separate company

In this Nov. 5, 2014 photo, a person walks in front of a Yahoo sign at the company's headquarters in Sunnyvale, Calif. Yahoo reports quarterly financial results on Tuesday, Jan. 27, 2015. (AP Photo/Marcio Jose Sanchez) In this Nov. 5, 2014 photo, a person walks in front of a Yahoo sign at the company's headquarters in Sunnyvale, Calif. Yahoo reports quarterly financial results on Tuesday, Jan. 27, 2015. (AP Photo/Marcio Jose Sanchez)

By Associated Press January 27, 2015 1 min read

SAN FRANCISCO (AP) – Yahoo CEO Marissa Meyer is spinning off the company’s prized stake in China’s Alibaba Group Holding in a move that will avoid paying billions in future taxes.

A newly formed entity called SpinCo will inherit ownership of Yahoo’s 384 million Alibaba shares when the tax-free spin-off is completed toward the end of this year.

Tuesday’s much-anticipated announcement about the management of Yahoo’s 15 percent stake in Alibaba overshadowed Yahoo’s results for the final three months of last year.

Yahoo’s shareholders are far more interested in Mayer’s plans for the Alibaba stake because it’s currently worth about $39 billion. That’s far more than the value of Yahoo’s own online services, which have been struggling to generate more revenue for the past six years.