Tax-Focused Q4 Is Also About What's Next for Post-Alibaba Yahoo

Yahoo will announce its fourth-quarter earnings later today. And, as I have previously written, all will be focused on what kind of plan the company will offer to shield its giant stake in China’s Alibaba Group from taxes.

The Silicon Valley Internet giant cannot make any real move until a sale lockup expires later this year, but investors want to see some intention to hand over the proceeds to them in the most lucrative manner possible. It’s important since the Chinese stake, along with another in Yahoo Japan, make up most of Yahoo’s valuation.

While that will likely be the show for CEO Marissa Mayer and CFO Ken Goldman, what I will be contemplating will be what they and other Yahoo execs are planning next — you know, once they dispense with that giant pile of money. Being a responsible steward of capital is one thing, but being a great creator of real growth and innovation is the real point, isn’t it?

And while the Asian stakes have pretty much been the story of Yahoo’s soaring stock over the last years, to keep that pace, the company faces some big choices over the next years.

They include, in no particular order (and please enjoy this lovely inspirational quote I found on Yahoo-owned Tumblr!):

• How to reshape Yahoo’s much-challenged advertising business, as programmatic and mobile take over and display sales fall like a stone. In this, the company finds itself chasing well-armed rivals like Facebook and Google and, perhaps most problematic, more creative ones like Snapchat. Being in the ad business today is brutal, as we all know. And this quarter is no party for Yahoo — Wall Street expects revenue to decline again, to $1.19 billion.
• How to force more forward-leaning media efforts (“Please, God, no more digital magazine pitches from Marissa,” said one exasperated media buyer to me recently). Since rumors about buying old media properties are also cringe-inducing, should Yahoo be looking at new developments and devices? Think about how interesting it would be now had Yahoo bought an innovative company like GoPro and created a new kind of YouTube rather than try to poach from the old one. Just one idea!
• How to bring in a new kind of exec for the next phase, since the ones there have not exactly invented the next Instagram as promised from all those mobile and other acquisitions of fresh talent. While there have been some interesting moves of late and more to come (watch this space), it’ll be instructive to see who Mayer taps to lead the next charge of her turnaround.
• How should Yahoo consider itself as it gets smaller once it spins off the Asian assets (if it spins off the Asian assets, that is). There is a distinct scenario in which Yahoo gets bought going forward, which is not without its merits. And the speculation about an AOL hookup never seems to end (it’s almost like a rash that never goes away, even with the liberal application of medicated cream).
• How much should Mayer invest in search and how hard should she try to exit its deal with Microsoft over search technology. While it would be a coup would she ever convince Apple to use Yahoo as its mobile search partner, this is a very long, long shot. And sources inside Microsoft scoff at the idea that she can disengage Yahoo from their partnership, noting that it is nigh impossible to do so.

We’ll see, of course, in the ongoing saga that is Yahoo, but it will be nice to talk about something other than how to sell an investment in a tax-efficient manner. That is, unless you are an accountant — if so, enjoy!

This article originally appeared on Recode.net.

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