Yahoo's Second Quarter Struggles Eased by Alibaba

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July 15 (Bloomberg) -- Yahoo is retaining more of its stake in Alibaba under a new agreement and promised to return cash to shareholders from at least half of any proceeds from the Chinese e-commerce company’s initial public offering. Cory Johnson reports on "Street Smart." (Source: Bloomberg)

Alibaba stakes yahoo!

Owns -- yahoo!

Had reported they were going to sell 208 million shares of their alibaba holding, which would be a one-time gain for the company but means the regular benefit yahoo!

Was getting from the payouts was going to go down.

Now they are telling us they'll only have to sell 140 million shares, so a cut of about 25% of the number of shares.

What that means is alibaba is the gift that keeps on giving for yahoo!. yahoo!

Will hold onto those shares and won't face quite as big a tax it from capital gains of selling the shares and continue to receive the benefit of the regular payments they've been getting which has been boosting their earnings.

You have a tale of two stories.

About corporate warnings -- corporate earnings leading the markets will stop with a lot of companies and technology that have had crummy results and if you look at yahoo!, minus the alibaba results, you see some pretty weak numbers.

Year over year, yahoo!'s operating profit, the profit the company makes doing yahoo!

Stuff , the operating profit for this company has changed dramatically . so dramatic fall in their operating profit.

Companies like ibm, oracle, hewlett-packard, some of the giants and technology.

You need to see growth to have the market keep growing.

We've seen it going in these companies, we seen falling revenues and using tricks like a stock buybacks.

Alibaba in terms of its quarterly net income, up 36%, cory johnson.

Alibaba orderly revenue up 42%. one of the fascinating things about alibaba is here it is, and e-commerce company that actually makes money.

And a lot of that money is going to yahoo!

And that is what is supporting yahoo!

Results, not the results of yahoo!

Itself.

As yahoo!

Is struggling to make money, there are two things -- one is a big restructuring costs.

Analysts would strip that out and say let's not fall them for the restructuring costs and come up with an adjusted operating number.

What you see not great revenue gains even though they have spent billions of dollars in acquisitions to add to revenues.

Troubling results from yahoo!

Right now.

Thank you for breaking it down.

My thanks to my panel -- great

This text has been automatically generated. It may not be 100% accurate.

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