Yahoo has stopped talks with its Asian partners about selling back its stake, Kara Swisher at All Things D reports.Yahoo is no longer interested in a “cash-rich split” with Alibaba and Yahoo Japan.
Swisher doesn’t seem to have much of an explanation for why Yahoo changed its mind.
Our speculation: Yahoo’s new CEO looked at the complicated cash-rich split plan and changed his mind about it, or decided he wanted to take longer to assess the situation.
The board members that were pushing this deal are out of the company. This will be one of the first big moves Thompson makes, and he probably doesn’t want to screw it up.
The cash-rich split deal always seemed fishy. To make it work, Yahoo was going to have to take on new operating businesses. That means it would have to acquire a company like WebMD, or The Weather Channel. For a company that has famously struggled with focus, adding MORE companies seems like a huge mistake.
The smarter move is to just hold onto its stakes in Alibaba and Yahoo Japan and watch them grow in value without having to do anything.
Yahoo’s stock dropped 7 per cent in reaction to the news. It’s down 5 per cent as of this writing.