Marissa Mayer has finally addressed the Alibaba situation.

The recently hired Yahoo! CEO yesterday closed a long-awaited deal to cash out of the struggling Internet giant’s investment in the Chinese search site Alibaba, headed by hard-charging tech tycoon Jack Ma.

With its business floundering, Yahoo!’s investment in Alibaba has been a bright spot. In a complex transaction valued at $7.6 billion, Yahoo! will cut its stake in Alibaba to about 23 percent from 40 percent.

In 2005, Yahoo! had paid just $1 billion for its Alibaba stake.

Yahoo! expects an after-tax windfall of $4.3 billion. Mayer plans to spend around $3 billion on stock repurchases, after months of speculation about how shareholders will benefit.

“This yields a substantial return for investors while retaining a meaningful amount of capital within the company to invest in future growth,” Mayer said in a statement.

Analysts have speculated that Mayer may use the cash, which will beef up its current balance sheet of $1.9 billion, to fund acquisitions of fast-growing tech companies such as the scrapbook site Pinterest or the Foursquare check-in service.

Yahoo! shares yesterday closed at $15.90, up 22 cents, or 1.4 percent, giving it a market value of about $18 billion. By comparison, its deal with Alibaba values the latter at about $40 billion.