Private equity firms and media companies are reportedly vying to snap up Yahoo’s struggling internet arm as the US technology giant considers spinning off its traditional web business.

Yahoo's board is understood to be mulling demands made by an activist shareholder for Yahoo to offload its core services as an alternative to spinning off its lucrative £33 billion stake in Chinese ecommerce group Alibaba, which could land it with a tax bill of more than $10 billion.

The board discussions come as Yahoo chief executive Marissa Mayer faces increasing pressure to bolster performance and a flagging share price.

New York hedge fund Starboard Value is seeking to gain board support for a plan to sell Yahoo’s websites, mobile applications, ad services and data analytics. This could help Yahoo dodge capital-gains taxes on its investment in Alibaba. – (PA)