Investors fret Yahoo's future, stock dips

SAN FRANCISCO (AP) - Yahoo may be losing some appeal on Wall Street now that U.S. investors can buy directly into Alibaba.

Yahoo's stock fell Monday as investors grappled with uncertainty about CEO Marissa Mayer's efforts to turn around the struggling Silicon Valley company. The sell-off came even though Yahoo reaped more than $9 billion last week from selling some of its stake in Alibaba, as the Chinese e-commerce company held a record-setting initial public offering of stock.

Yahoo has promised to return at least half of the after-tax proceeds to shareholders - likely through stock buybacks.

But some investors aren't waiting, now that they're able to buy Alibaba shares directly, according to Brian Wieser, an Internet stocks analyst at Pivotal Research.

Before the Alibaba IPO, Yahoo was one of the few ways U.S. investors could tap into the growth of e-commerce in the world's most populous country. That was because of Yahoo's large stake in the Chinese company. Yahoo's stock has risen more than 30 percent during the past year, largely on the strength of investor excitement about Alibaba's booming business.

On the second day of public trading for Alibaba, Yahoo shares fell more than 5 percent to close Monday at $38.65.

Although Mayer has not said what she'll do with $3 billion or so of the Alibaba proceeds not going to shareholders, analysts believe she could use that for acquisitions to help Yahoo revive its struggling advertising business and expand its online video programming.