In contrast to Chief Executive Officer Marissa Mayer's plan to sell the company's Alibaba stake and revive the Internet unit, Yahoo! seems to be weighing a sale of its core business. The sharp reversal, which would probably be announced on Wednesday, was the result of intense pressure from activist investors, according to CNBC News.

Since the company would not be selling its Alibaba stake, which is valued at $31 billion, Yahoo! would consider selling its core Internet operations instead. Doing so would make its Alibaba stake the company's primary asset.

The company's stake in Yahoo! Japan would probably also be spun off, reports The New York Times.

Mayer, who was hired in 2012 to turn the company's fortunes around, had initially planned to spin off Yahoo!'s 15 percent share in Alibaba, bundled with a small-business services unit, into a new company that was to be called Aabaco. She also planned to focus her attention on the company's core businesses, which consist of its news sites, popular email service and products like Tumblr and its advertising technology, according to FOX Business.

Led by the Starboard Value hedge fund, investors argued against Mayer's plans, stating that the Internal Revenue Service might seek capital gains taxes of up to $10 billion from the Alibaba transaction. The IRS had previously refused to affirm in advance that the spin-off, if ever it does happen, would be tax-free.

The news seems to have sat well with investors, however. Yahoo!'s shares rose 2 percent in after-hours trading and Alibaba's shares rose by 1.3 percent.

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