Yahoo will no longer spin off its $30 billion stake in Chinese e-commerce company Alibaba as investors fear losing billions of dollars in taxes from the transaction, a CNBC report claims.

The Web media company initially planned a spinoff of its 15 percent stake in Alibaba but is instead considering other alternatives, including selling its core Internet operations, leaving the said Alibaba stake as its major asset.

Yahoo is facing pressure from shareholders who are concerned whether the spinoff would be tax free.

Alibaba alone accounts for $30 billion of Yahoo's $32 billion market capitalization.

Yahoo CEO Marissa Mayer devised the spinoff strategy for about a year in an effort to turn the Internet company around. The board's decision to reverse the Alibaba stake spinoff plan, however, comes in the wake of the Internal Revenue Service's refusal to say whether the transaction would be tax-free.

The uncertainty has led activist investor Starboard Value to argue that the I.R.S. could demand $10 billion or more in capital gains taxes.

Mayer, a former Google executive, has been at the helm of Yahoo for three years. The company was already in bad shape when she took over. Observers claim she has failed to meet expectations despite giving Yahoo a boost.

The company has had four different chief executives between 2007 and 2012. However, all failed to revive the company, which was once a dominant player in the early days of the World Wide Web.

Yahoo and Alibaba's partnership started in 2005 when Yahoo invested $1 billion in a 40 percent stake in Alibaba, then a small and unknown business whose market value skyrocketed in the past decade, turning the group into a multibillion dollar company.

The two started off as rivals but eventually teamed up in hopes to beat eBay, which controlled about 90 percent of the online auction marketplace in China.

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