Yahoo Inc's board of directors has agreed to keep exploring a plan to split off the Internet company's Asian assets in a complex deal valued at $17 billion, The Wall Street Journal reported on Friday.

The company's board of directors decided to move forward with negotiations related to the deal on Friday, while also not ruling out separate investment proposals by private equity firms, the Journal reported, citing anonymous sources.

Yahoo, which fired Chief Executive Carol Bartz in September, has been undergoing a strategic review to revamp growth in its business. The Internet pioneer has struggled to compete with Google Inc, Facebook and other fast-growing rivals.

The Asian split-off deal would effectively transfer most of Yahoo's 40 percent slice in China's Alibaba Group back to the Hangzhou-based Internet company and all of its stake in Yahoo Japan to Softbank Corps, sources familiar with the matter have told Reuters.

Alibaba and Yahoo Japan would each create separate legal entities where they would put cash and certain, yet-to-be-determined operating assets, and then trade those with Yahoo, making the deal tax-free, the sources said.

Yahoo shareholders have applauded the proposed plan, sending shares of Yahoo up nearly 6 percent earlier this week when news surfaced that the plan was under consideration.

Yahoo shares closed Friday's regular trading session up 1.2 percent at $16.19.

Private equity firms TPG and Silver Lake have each advanced separate proposals to Yahoo's board that would involve the firms purchasing minority stakes in Yahoo, sources have told Reuters. Those plans have been fiercely opposed by some of Yahoo's largest shareholders, including activist hedge fund manager Dan Loeb of Third Point LLC.

At the end of the contemplated Asian split-off transaction Yahoo would retain a 15 percent stake in Alibaba, the sources said. The final deal size will depend on how the assets are valued, another source said.

Yahoo declined to comment.

(Reporting by Alexei Oreskovic in San Francisco, editing by Matthew Lewis)