Yahoo cancels Alibaba spinoff plan, will create a separate company

San Francisco

YAHOO! Inc will scrap the long-planned spinoff of its stake in Alibaba Group Holding under pressure from investors concerned about the tax risks of the deal.

The Web portal will instead create a separate company to hold the rest of its assets. The new publicly traded company will house Yahoo's Internet business and its 35 per cent stake in Yahoo Japan, giving investors a clearer view of the company's core business. The reversal is an admission of defeat for chief executive officer Marissa Mayer, who was brought aboard in 2012 to revitalise the once-dominant Internet brand yet has struggled to find the right strategy to return the company to growth.