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Yahoo looks for ways to shed Japanese namesake

The company is reportedly trying to get the deal done without being forced to pay as much as $4 billion in taxes.

Yahoo is currently in discussions with Yahoo Japan to sell off its share in the Asian company.

Speaking to reporters yesterday, Yahoo Japan Chief Financial Officer Akira Kajikawa said that Yahoo is trying to "finalize the mechanism [for selling its stake] and we are cooperating with them," according to The Wall Street Journal, which was in attendance at the event.

Kajikawa didn't say how Yahoo would go about selling its 35 percent stake in Yahoo Japan, but according to the Journal's sources, the company is trying to find a way to do it without paying taxes. Yahoo could be forced to pay as much as $4 billion in taxes to shake its Asian assets, the Journal's sources say.

Last month, The New York Times reported that Yahoo was considering selling its Asian assets in a tax-free deal valued at $17 billion. The Times said that the deal would include selling its entire stake in Yahoo Japan, and keeping only 15 percent of its ownership in China-based Alibaba Group. The $4 billion tax savings presumably includes deals struck with both Yahoo Japan and Alibaba.

Although Yahoo gave the Japanese company its name, it's actually a standalone company founded in 1996. Japanese telecommunications company Softbank, another shareholder, owns 42 percent of Yahoo Japan. According to the Journal, Softbank does not plan to acquire any of Yahoo's share in Yahoo Japan.

In 2010, Yahoo's strong relationship with the Japanese company weakened after Yahoo Japan announced a search pact with Google. The deal paved the way for Google to power Yahoo Japan's search and advertising services. Not surprisingly, Microsoft, which had signed an earlier search deal with Yahoo in the U.S., cried foul.

Since then, as Yahoo's shares have fallen and its financial performance has slipped, the company has been looking for ways to turn things around. Yahoo's board tried to change its luck last year by firing CEO Carol Bartz, and starting a search for a new CEO. The company finally found her replacement earlier this month, hiring Scott Thompson as chief executive.

Now, Yahoo is focusing on raising money. Over the last several months, several investors and even Microsoft have reportedly considered offering buyout or partial-ownership bids for the company, but so far, it hasn't signed a deal. Last month, the Times' sources said that if Yahoo can sell its Asian assets, the company will probably not sell to bidders.

Yahoo shares are trading down 0.58 percent to $15.47. Although that price is down about 13 cents over the last year, it's up significantly from the stock's 52-week low of $11.09.