In something of an abrupt about-face, Yahoo is scrapping its original plan to spin off its prized stake in China's Alibaba Group 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. The move is what the Wall Street Journal calls "a blow" to Mayer's turnaround, and it prolongs "the uncertainty of a 20-year-old Internet company fighting for survival."
Yahoo said 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. (Read more Yahoo stories.)