SAN FRANCISCO – Yahoo Inc. CEO Carol Bartz found herself in a familiar position Wednesday: assuring stock market analysts that she will clean up a mess damaging the long-slumping Internet company's market value.
The latest challenge to confront Bartz in her nearly 2 1/2 year-tenure emerged two weeks ago. That's when Yahoo jarred investors by informing them of an abrupt change affecting the value of its 43 percent stake in Alibaba Group, one of the leaders in China's rapidly growing Internet market.
Alibaba had spun off a potential jewel — its online payment service Alipay — into a separate company controlled by its CEO, Jack Ma, without giving Yahoo anything in return.
Yahoo's stock price has plunged by 13 percent since the May 10 revelation, leaving Bartz little choice but to place the issue at the top of the agenda for a meeting that Yahoo had scheduled to provide an update on its turnaround strategy. The Associated Press monitored the San Jose, Calif. meeting through a webcast because Yahoo wouldn't allow reporters to attend.
Although she provided few specifics, Bartz spent most of the first hour trying to reassure analysts that Yahoo will be "appropriately compensated" for the loss of Alipay from its investment portfolio.
Bartz made her points flanked by Yahoo's chief financial officer, Tim Morse, and company co-founder, Jerry Yang, who also is a member of Alibaba's board of directors. Both men flew to Asia last week to discuss the Alipay matter with Alibaba's major shareholders, who include Ma and Japan's Softbank Corp. Bartz said all the key shareholders have committed to negotiating a fair payment for the Alipay spinoff and preserving the value of another Alibaba asset, online auction site Taobao.
"This is a very complex situation," Bartz said. "We have approached this thoughtfully and methodically. We think this is the right path to protect shareholder interests."
Bartz wouldn't predict when the Alipay issue would be resolved.
Yang, who spent 19 months as Yahoo's CEO before being replaced by Bartz in January 2009, said the Alipay spin-off was necessary to ensure Chinese regulators license the service. The licensing wouldn't have been possible if Alipay wasn't wholly owned by Chinese citizens, Yang said.
Yahoo said Alibaba notified it about the change in Alipay's ownership on March 31. None of the executives explained why Yahoo waited nearly six weeks to disclose it.
"We believe our disclosure was timely and appropriate," Bartz said.
Later in the day, Morse said Yahoo is still exploring ways to enable shareholders to get their money out of another closely watched Asia investment, Yahoo Japan Corp. As has been the case since last year, Yahoo is still considering spinning off its 35 percent stake in Yahoo Japan or transferring the holdings into a tracking stock.
"We are pursuing some attractive alternatives, but it's not a quick and easy process," Morse said of the Yahoo Japan situation.
Investors seemed largely unmoved by what they heard Wednesday. Yahoo shares added a penny to close at $16.15.
Bartz, 62, and her top lieutenants spent most the meeting trying to show Yahoo is finally headed in the right direction after years of misguided decisions and aimless execution.