Starboard, which did not speak to Reuters, wants Yahoo to spin off its Web and email business, merging them into AOL, one Yahoo investor who has spoken with the activist said. That would leave Yahoo's holdings in Chinese e-commerce giant Alibaba Group Holding Ltd and Yahoo Japan Corp in a separate company, satisfying investors who want the company to monetize those assets. Starboard was once active in AOL and lost a 2012 battle to unseat three board directors.