Yahoo owns about 384 million shares of Alibaba, which it cannot sell until September, the one-year anniversary of Alibaba's US initial public offering.

The stake is worth about $40 billion, while its Yahoo Japan stake is valued at about $8 billion.

That means investors buying Yahoo's stock now get to own the core US business for free and are not giving the company credit for its roughly $7 billion of net cash.

"The US business is still cash generative－it's not worth nothing," said Brett Harriss, an analyst for Gabelli & Co in New York.

Tokyo-based SoftBank, which controls wireless carrier Sprint Corp, has been looking for more US investments. SoftBank and Yahoo also are the biggest shareholders in Yahoo Japan.

Similarly, Tencent Holdings Ltd., China's second-largest Internet company, could be a logical suitor for Yahoo as it tries to expand in the US, according to Doshi.

With Yahoo gaining mobile-advertising market share, it could even be a compelling target for Microsoft Corp as the $379 billion software provider falls behind in mobile Internet, Doshi said.

Starboard Value LP, the activist investor putting pressure on Yahoo's management and board, has said that Yahoo should explore a merger with AOL Inc, estimating as much as $1 billion of cost savings from such a transaction.