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After the sale, what happens to Yahoo's leftovers?

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When Verizon announced Monday it was snapping up Yahoo for a cool $4.83 billion, the sale was hailed as the death knell for the early internet, but it also raised questions about the future of some of its properties in the Asia Pacific.


The purchase hands Verizon Yahoo's core business, but does not include its minority equity interests in Alibaba and Yahoo Japan, a collection of patents and some cash. (As a side note, the patent collection is called Excalibur, which, OK.) These holdings will be left behind as part of a renamed publicly traded investment company, for now being referred to as "RemainCo."

While its 15 percent stake in Alibaba is held up as the most valuable remaining property of the company formerly known as Yahoo, RemainCo also has a hand in Yahoo Japan, of which it has a 35.5 percent stake, and an Australian joint venture called Yahoo7.

The Yahoo-Verizon sale won't officially go through for many months, so "RemainCo's" surviving properties will be ones to watch.

Next up for Yahoo Japan

Created in 1996, Yahoo Japan was founded as a joint venture between Yahoo and the Japanese company SoftBank, best known for its friendly robots, to provide a portal for internet search. 

It has since branched out into news and technology, including a joint venture with BuzzFeed to found the BuzzFeed Japan Corporation in 2015.

Given Softbank holds the greater stake, it could be a potential buyer for Yahoo Japan if "RemainCo" wants out. Softbank has been approached for comment.

For now, Yahoo's core business (the part that was sold) is not talking about a sale but not denying one could take place. According to a Yahoo spokesperson, the company is focused on "maximizing the value" of its Yahoo Japan assets as well as its Alibaba holdings.

"Work has been underway for some time to separate Yahoo Inc.'s operating business from its Asia equity stakes," she said. "The plan for these stakes is subject to the review and approval of our Board."


Jack Ma, chairman of Alibaba Group, delivers a speech during the 2016 Investor Day at Alibaba headquarters on June 14, 2016 in Hangzhou, Zhejiang Province of China.


The future of Yahoo7

In Australia, Yahoo and Seven West Media have a media joint venture called Yahoo7, which launched in 2006. For the moment, all parties are remaining tightlipped about the sale's implications.

Until the transaction is completed, presumably in early 2017, it is "business as usual" for the venture, Seven West Media said in a statement.

The company will be considering the various options it is permitted under the Yahoo7 joint venture agreement, however, and looking to extract the most value for shareholders. 

"Seven West Media will have an opportunity ... to consider which options it selects or a combination as may be negotiated with the new owners of Yahoo, Inc," it added.

"Seven West Media looks forward to discussing with Verizon Communications, the company's future plans for Yahoo, Inc in Australia and any impact these may have on Yahoo7 in Australia and New Zealand."

But what about those Alibaba shares?

Yahoo's Alibaba stake, worth around $32 billion, has long been regarded as one of its most valuable assets.

Yahoo first acquired a 40 percent stake in the Chinese e-commerce giant in 2005 for about $1 billion. Alibaba then clawed back half of that in 2012. Currently, Yahoo owns 15 percent of Alibaba.

"The transaction will establish a balanced ownership structure that enables Alibaba to take our business to the next level as a public company in the future," Alibaba CEO Jack Ma said at the time.

As Mashable has noted, those Alibaba shares became a millstone as investors expected to see some return from the investment. After an attempt to spin off the Alibaba holding failed in 2015, Yahoo CEO Marissa Mayer was ostensibly forced to choose between selling the shares, accompanied by a huge tax bill, or getting rid of the company's core internet business. Clearly, the latter won out.

Now all eyes are on what happens to that valuable Alibaba stake. In a scenario floated by Matt Levine at Bloomberg in late 2015, once Yahoo's core business was sold, it could also sell off Yahoo Japan and then hand the rest back to Alibaba, which could then retire the returned shares. 

Alibaba declined to comment.

Yahoo's life as an independent company may be over, but the rest of "RemainCo" won't be out of the headlines for long.

Source : http://mashable.com/

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