Yahoo Gets Boost From Alibaba Deal Despite Poor Quarter

Yahoo will pay investors at least half the proceeds from its Alibaba share sale when the Chinese Internet retailer goes public, and it will keep a larger stake than expected, helping to offset Yahoo’s disappointing results Tuesday. "What you see is the fundamentals at core Yahoo continue to deteriorate, but there's at least some good news on the Alibaba front," said Macquarie Research analyst Ben Schachter. Yahoo owns about 24 percent of Alibaba Group Holding Ltd., which is expected to list its shares on the New York Stock Exchange later this year. Yahoo said that Alibaba has agreed to its request to reduce the maximum number of shares it sells in the Alibaba IPO from 208 million to 140 million. Yahoo is trying to revitalize a stagnant online advertising business as Chief Executive Marissa Mayer marks her two-year anniversary at the Internet company. Yahoo earned $270 million, or 26 cents per share, in the March-June quarter. That's down from $331 million, or 30 cents per share, in the same period a year earlier. Adjusted earnings were 37 cents per share in the latest quarter. Revenue fell 4 percent to $1.08 billion.

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-The Associated Press and Reuters