Boston, MA 07/16/2014 (wallstreetpr) – Yahoo! Inc. (NASDAQ:YHOO) said it would pay at least 50% of the gains it received from Alibaba Group Holding Ltd after the company went public this year. The web portal seeks to keep a bigger stake in the China-based e-commerce company than what analysts had expected.
Yahoo, enjoying an approximate stake of 24% in the world’s biggest Internet retailer, is now the highest asset holder on the Wall Street. The company announced yesterday that Alibaba has agreed to cut down the shares Yahoo needs to sell in the IPO by 50%. Alibaba initially demanded Yahoo to sell as many as 208 shares as it announced IPO, but now has limited the amount to only 140 shares.
The announcement has helped Yahoo! Inc. (NASDAQ:YHOO) to boost its recently reported disappointing results. The U.S.-based company had expected third-quarter net revenue to be in the range of $1.02 billion to $1.06 billion. The revenue figure had disappointed Wall Street analysts, who had forecasted revenue around $1.1 billion.
The decline was on account of 24% fall in the rates of online display campaign in the second quarter. Executives said that the company had difficulties in selling premium advertisements to marketers. Apart from this, the delay in forming a new advertisement system also contributed to the unexpectedly low results. Yahoo! Inc. (NASDAQ:YHOO) however said it would make necessary modifications by the next two-quarter periods. Yahoo’s revenue was lower than that of competitors including Google Inc (NASDAQ:GOOG) and Facebook Inc (NASDAQ:FB).
Alibaba seeks to trade on the New York Stock Exchange commencing this year, and the IPO is speculated to be biggest than ever offered by any U.S. technology company. Alibaba, which has more e-commerce business than rivals Amazon.com, Inc. (NASDAQ:AMZN) and eBay Inc (NASDAQ:EBAY) together, has a value of around $200 billion, according to analysts’ estimate.
