SUNNYVALE, California (BLOOMBERG) - Yahoo! Inc. scrapped its long-planned spinoff of shares in Alibaba Group Holding Ltd. after pressure from investors concerned about the tax risks of the deal.

The Web portal will instead explore a reverse spin, in which the assets and liabilities excluding the Alibaba stake would be transferred to a newly formed company, the company said in a statement Wednesday. The stock of the new entity would be distributed pro rata to Yahoo shareholders, resulting in two separate publicly-traded companies.

The backflip is a defeat for Chief Executive Officer Marissa Mayer, who was brought aboard in 2012 to revitalize the once-dominant Internet brand that has struggled to find a strategy to return the company to growth.

With sales hovering around 2006 levels, investors' patience has begun to wane, and activist shareholder Starboard Value LP last month called for the company to drop the Alibaba spinoff and instead sell its Web businesses.

"Among other factors, we were concerned about the market's perception of tax risk," Chairman Maynard Webb said in a statement. "The board remains committed to accomplishing the significant business purposes and shareholder benefits that can be realized by separating the Alibaba stake from the rest of Yahoo."

The company also announced Max Levchin has resigned from the board. He will focus on his responsibilities as the CEO of payments company Affirm Inc.