Should Yahoo! Inc. (YHOO) Invest Its Money from Alibaba Stake?

With the Alibaba’s upcoming IPO, a lot of speculations and discussions appear around Yahoo! Inc. (NASDAQ:YHOO), which is one of the largest shareholders of Alibaba. Yahoo!’s 23% stake is considered to be valued at $26 billion, which is quite a lot of cash. Therefore, analysts and experts are discussing what Yahoo! should do with the money it could get from the sale of its stake in Alibaba. Ross Levinsohn, the former interim Yahoo! Inc. (NASDAQ:YHOO) CEO, in an interview on Bloomberg discussed about Yahoo! and provided his views regarding uses of the money from Alibaba’s stake. 

“[…] It’s a great company, there are great people there. It’s finding its way, it takes time. She [Marissa Mayer] was right, when she came in and said it’s going to be a couple of years. But you got to lock into a strategy. For me, it was a media company with powerful technology and so the advertising is there, the people are there. It’s doing more than $4 billion in revenue, it’s doing hundreds of millions of profit. You got to lock down and plan for the future. The next year or so is going to be very important for that company […],” Levinsohn said.

Levinsohn said that if he had to decide for Yahoo! Inc. (NASDAQ:YHOO) what to do with the money from Alibaba’s IPO, he would choose to invest a large part of them in premium content and strategies that would allow to monetize that premium content. As an example, he mentioned that he was interested in Yahoo! Inc. (NASDAQ:YHOO) acquiring Hulu, because he considers that video content could provide a lot of value.

At the end, Levinsohn said that Marissa Mayer is a great CEO and whatever she decides to do with the money, where to invest them, “the markets will judge it and the entire industry will judge it.”

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