Yahoo! Inc. (NASDAQ:YHOO) is truly riding the high waves, it appears, in a bid to save investors from forking out billions of dollars as taxes. The reasons taxes are expected to be steep for the ex-search engine giant are the shares it holds in newly-listed e-commerce giant, Alibaba Group Holding Ltd (NYSE:BABA).
As Yahoo! Inc begins the process to spin out its shares in Alibaba, the restructuring appears to ask for some major changes within the company. The first of which is to spin-off a part of its business division, the Yahoo Small Business division.
Apparently, at the heart of Yahoo! Inc. (NASDAQ:YHOO) new strategies is to create a new entity called SpinCo, which will now house the employees employed in the Yahoo Small Business Division. The unit is currently deployed in selling online tools to owners of small businesses, to help them market their products and services online. The unit has roughly100 employees and the work force is expected to be invited to join SpinCo.
Yahoo Inc will appoint new management as well as new board of directors, according to its official post on Tumblr. There is no confirmation of the new location or the roles the employees will play in the new entity, as yet.
The new strategy by Yahoo! Inc. (NASDAQ:YHOO) is not a first of its kind in financial history, thus far. The most quote example of similar strategy: is of Liberty Ventures, which separated its profitable $3 billion TripAdvisor into a new venture, riding on the operational business of an online party supplies store, BuySeasons.
However, in this case Yahoo Small Business is already a larger player with over 1.5 million customers, and high profile ecommerce sites such as GoJane.com, a fashion shop and StringsandBeyond.com for online guitar strings purchasers.
Alibaba Group Holding Ltd (NYSE:BABA) stake for Yahoo! Inc. is apparently putting pressure on management to explore ways to bolster high investor taxes. With Yahoo Small Business division already earning $50 million before taxes, the spin-out is expected by the last quarter of this year!