The Internal Revenue Service spotlight on Yahoo is intense, as the multinational corporate flicks its 15% Alibaba stake across to a new, loosely branded public entity called Aabaco. This will function as a new shell for its Yahoo Small Business subsidiary it is hiving off to it. To make things more complex, Yahoo Small Business is being rebranded Luminate, a company Yahoo purchased and shut down in 2014.
Tax Office Spotlight on Yahoo Shareholders Too
At current value, the equity that Yahoo is shuffling across the table prices at over $32 billion, and this will find itself back in the pockets of Yahoo shareholders following redistribution. Yahoo is urging them to consult with their tax advisors concerning this. If the IRS decides the share transfer incurs tax, then it will be interesting to see is this places a financial spotlight on Yahoo too.
Luminate to Illuminate the Path Forward
Defunct Luminate started out a Pixazza in 2008, and became the world leader in making images interactive. In its heyday, it had more than 150 million active users and received 30 billion image views per year. Its talent and technology subsequently disappeared down a black hole at Yahoo’s Sunnyvale, California headquarters.
The immediate future of Luminate AKA Yahoo Small Business is blurred, although a company statement suggested that the name “reflects how we illuminate the path forward for our customers and underlines our commitment to helping small businesses grow,” and so say all their competitors too.
The Final Conundrum, the Name Aabaco
A spotlight on Yahoo of a different kind could fall on it if it tried to register the Aabaco brand in the United States. Aabaco Plastics already makes packaging products in Ohio, while Aabaco in Florida is busy cleaning up oil spills. There cannot be too many other $32 billion brands with names that do not deserve a copyright. All in all, this could turn out something of a branding gamble.