Shares of troubled search engine and media developer Yahoo surged nearly 6 percent late Wednesday after a report the company may unload its stake in China's Alibaba Group for about $17 billion.

Yahoo shares closed at $15.99, up 88 cents, after the New York Times reported directors of the Sunnyvale, Calif.-based company would meet Thursday to consider the deal. Yahoo shares have gained about 15 percent in the three months since CEO Carol Bartz, 63, was ousted and the company sought a new direction.

Under Bartz, Yahoo acquired about 44 percent of Alibaba, a Chinese online payments company. Jack Ma, Alibaba CEO, had said he would be interested in acquiring all of Yahoo, which has a market value of $19.5 billion.

Advised by Goldman Sachs and Allen & Co., Yahoo would put its stake in Alibaba as well as Yahoo Japan into a new vehicle, selling its interest in both or perhaps retaining a 15 percent stake in Alibaba. Someone told the Times the deal values the Alibaba stake at $12 billion and the Yahoo Japan stake at $5 billion.

This swap deal would be tax free and attractive to Yahoo investors. If accepted, Yahoo's directors, chaired by former ad executive Roy Bostock and including co-founder Jerry Yang, would scuttle proposals from private equity investors Silver Lake Partners and TPG to acquire a friendly minority stake.

Yahoo representatives declined comment. Executives of Alibaba Group, including CFO Joseph Tsai, were reported to be in New York to handle discussions.

In the interim, Yahoo is being run by CFO Tim Morse, pending selection of a permanent CEO.

New York investor Daniel Loeb, through his Third Point Capital, has acquired a 5.2 stake in Yahoo, demanded greater shareholder value and last week demanded to be shown documents the company's advisers have furnished to potential investors.

Yahoo's enterprise value, or its market capitalization, debt, minority interest and preferred shares, minus total cash and cash equivalents, is $16.67 billion.

By comparison, Google's enterprise value is $168.87 billion.