Yahoo’s new Luminate business will be Alibaba spinoff instrument

When Yahoo bought photo ad network Luminate last year, it immediately shut it down and folded its ad-placing technology and staff into Yahoo’s main Sunnyvale operations. Now, Luminate is back, and it seems to have nothing to do with its original startup intent.

Luminate has become the new brand name for Yahoo Small Business, according to a blog post. More importantly, at least to Wall Street, it’s an instrument for Yahoo to conduct a tax-free spinoff of its more than $30 billion stake in Chinese e-commerce giant Alibaba.

Yahoo filed a statement with the Securities and Exchange Commission earlier this month letting the government know it was creating a newly independent public entity, Aabaco Holdings, to take over Yahoo’s 384 million shares in Alibaba, a 15 percent stake in the Chinese company that went public last year.

But to create such a spinoff business that rewards Yahoo shareholders, it has to have a real business purpose. That’s why Yahoo earlier this year detached its e-commerce division, Yahoo Small Business, which helps small businesses sell their wares online. Yahoo CEO Marissa Mayer at the time called it a “legacy, ancillary business.”

Now that it’s being renamed Luminate, it’s not clear what the business will do. According to the statement, the name “reflects how we illuminate the path forward for our customers and underlines our commitment to helping small businesses grow,” but no details are provided.

Some longtime partners, however, say they are pleased that the business is breaking off because it will bring more focus and resources. Clients who use Yahoo’s e-commerce software platform range from stay-at-home entrepreneurs to multi-million-dollar firms with distribution warehouses, said Kevin Richards, CEO of e-commerce marketing agency Ventura Web Design, which has partnered with Yahoo Small Business — also sometimes known as Yahoo Stores — for more than 15 years.

“Because it’s a part of such a big company, it hasn’t received the growth and attention a lot of its customers were looking for,” Richards said. Now that it’s on its own, it will be able to chart a road map toward faster growth, he said.

Above: The new Luminate logo, courtesy of Yahoo.


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  • John_JP

    Aabaco Holdings has been a paving company in Iowa for 16 years. It’s worth about $35 million. I don’t think they’ll be happy that someone decided to use their name without their permission.

  • Farm Peeps

    Yahoo Small Business migration to Luminante (rebranded last minute to Aabaco Small Business) Delay 2+ dayss and down on launch. Many SB users cant manage thier stores!

    • Yajur Solutiions

      We recently helped a Yahoo small business client successfully resolve their issues with yahoo small business. If you have trouble accessing your email, hosting or migrating to aabaco (Luminate), please contact us we will help you with work arounds or migrate out of yahoo small business to different hosting of your choice platform.

      Thank you
      Yajur Solutions Inc