MoneyWatch Tech

​Yahoo scraps original Alibaba spin off plan

/ CBS/AP

NEW YORK - Yahoo (YHOO) is scrapping its original plan to spin off its prized stake in China's Alibaba Group (BABA) and will instead break off the rest of its business into a new company.

The change of heart announced Wednesday comes after Yahoo's board met last week to review the proposed Alibaba spin off, as well as CEO Marissa Mayer's stalled attempts to turn around one of the Internet's best-known companies.

Yahoo Inc. said that its board will now look at alternatives to separate the Alibaba stake, focusing specifically on a reverse spin off. The company said in the reverse spin off, Yahoo assets and liabilities other than the Alibaba stake would be transferred to a newly formed company. The end result would be two separate, publicly traded companies.

"In addition to our efforts to increase value and diminish uncertainty for investors, the ultimate separation of our Alibaba stake will be important to our continued business transformation," Mayer said in a statement. "In 2016, we will tighten our focus and prioritize investments to drive profitability and long-term growth. A separation from our Alibaba stake, via the reverse spin, will provide more transparency into the value of Yahoo's business."

© 2015 CBS Interactive Inc. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report.

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