Yahoo has announced it will change its name and shrink its board, with CEO Marissa Mayer stepping down as a director, after its $4.8 billion deal to sell its core internet business to Verizon closes.
The remnant of Yahoo consisting largely of its 15% stake in Chinese e-commerce company Alibaba and 35.5% stake in Yahoo Japan will be known as Altaba, Yahoo said recently in a regulatory filing.
The new name is apparently a combination of “alternative” and “Alibaba.” According to Quartz, “it perfectly epitomizes what Yahoo has become.”
When Mayer stepped in as CEO, Quartz noted, “Yahoo was a company with $4 billion in annual revenue, $6 billion in cash, and a billion users. After it’s hacked to pieces, it will be nothing more than ‘alternative Alibaba.’” “The company that was once an internet giant and is still the third most visited Web property in the United States is now essentially a vehicle for holding Alibaba’s stock,” The Washington Post said.
Yahoo also said the size of its board will be reduced to five, with Eric Brandt, the former CFO of Broadcom, becoming chairman of Altaba. The six other current board members, including Mayer, have indicated they will resign effective upon the closing of the Verizon deal.
Mayer was named CEO of Yahoo after she left Google in 2012. She is expected to remain with the company once it becomes part of Verizon.
Yahoo’s stake in Alibaba is worth about $35 billion. The core business Yahoo is selling accounts for 10% of its market value, Evercore ISI analyst Ken Sena wrote in a Dec. 15 note, while about 61% of Yahoo’s worth is tied to its stake in Alibaba and 13% to Yahoo Japan Corp.
“The idea behind the [new] name is that Altaba’s stock can now be tracked as an alternative to Alibaba because Yahoo owns a sizable chunk of the Chinese company,” the Post said.
Whether the sale to Verizon will close is unclear. Verizon executives have said they are still investigating two separate data breaches involving Yahoo customer accounts.