Struggling Internet giant Yahoo! Inc. (YHOO) said Thursday that its chief executive Marissa Mayer has embarked on a review of the company's business strategy that may lead to changes to its current plans to restructure operations, repurchase shares and return to shareholders substantially all of the after-tax cash proceeds from the sale of a part of its ownership stake in Alibaba Group Holding Ltd.
In a regulatory filing, Yahoo said Mayer and the board of directors plan to review the company's growth and acquisition strategy, its restructuring plan that began in the second quarter and its cash position and planned capital allocation strategy.
In May, Yahoo agreed to sell back half of its 40% stake to the Chinese e-commerce firm Alibaba Group for about $7.1 billion, including $6.3 billion in cash and about $800 million in Alibaba preferred stock. Yahoo would receive at least $4.3 billion in cash after tax from the deal. The Sunnyvale, California-based company said at the time that it it planned to return substantially all of that to its shareholders.
While the form of the return of capital to shareholders was not yet finalized, Yahoo's board increased the company's share buyback authorization by $5 billion concurrently with the Alibaba deal.
Mayer's plan to review Yahoo's growth and acquisition strategy as well as its cash position and planned capital allocation strategy has raised speculations that she may be thinking of acquiring some hotter, younger Internet or social start-up for a turn around at the struggling Internet company.
Mayer, a former executive at Google Inc. (GOOG), became the chief executive officer and a director of Yahoo on July 17.
The appointment of Mayer ended a two-month old search for a permanent Yahoo CEO that began in mid-May after Scott Thompson resigned as CEO and a director of the company following relentless calls from investors, including Daniel Loeb of hedge fund Third Point LLC, to fire him. The move came after Thompson was found to have embellished his academic credentials, which undermined his credibility as a technology expert.
Yahoo shares, which have traded in a range of $11.88 to $16.79 over the past year, closed Thursday's regular trading session at $16.01, down 16 cents, and lost an additional 55 cents or 3.44% in after hours trading.
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